Accounting for income and expenses in Uzbekistan

An organization records income and expenses in the reporting period concerned (Article 18 of the Law), regardless of payment. Revenue is recognized after the NAS 2 criteria (paragraph 16 of NAS 2) are met, while costs are allocated among production cost, period expenses and financing activities. Every entry must be based on a primary accounting document (Article 14 of the Law).

At a glance:

• Payment alone does not determine the period in which income or an expense is recognized.
• A customer advance is not revenue (paragraph 21 of NAS 2).
• Production costs, period expenses and finance expenses are recorded separately.
• The primary document, accounting register and inventory count connect a transaction to the financial statements.

Updated: 04 September 2026

Which standards apply

Most commercial organizations keep accounts under the National Accounting Standards (NAS), while International Financial Reporting Standards (IFRS) are mandatory for specified categories. The Law includes assets, liabilities, equity, reserves, income, expenses, profit, losses and related transactions among the objects of accounting (Article 7 of the Law).

Joint-stock companies and commercial banks (paragraph 1 of Resolution PP-4611), insurance organizations and major taxpayers keep accounts and prepare financial statements under IFRS. A further transition procedure now applies to public-interest entities, as explained below. Budget organizations, banks and non-bank credit institutions fall outside the general scope of NAS 2 because they are subject to sector-specific rules.

Accounting is based on continuity, faithful information and comparability (Article 3 of the Law). Each transaction is documented and recorded using double-entry accounting (Article 4 of the Law), in monetary terms and in at least two accounts.

This article does not replace an entity's accounting policy or explain the financial-statement forms. The separate accounting-policy guide describes the methods that an organization adopts internally. The financial-reporting guide is relevant when preparing annual forms and deciding whether NAS or IFRS applies.

What counts as accounting income

Revenue from an entity's principal business activity is an asset increase or liability decrease (paragraph 3 of NAS 2) that increases equity. An owner's contribution to equity is not revenue. Business income is divided between operating and financing activities (paragraph 4 of NAS 2).

NAS 2 applies to the sale of goods and services (paragraph 6 of NAS 2), performance of work, interest, royalties and other income earned by allowing another party to use assets. Indirect taxes and amounts collected on behalf of third parties are excluded from revenue (paragraph 11 of NAS 2). An intermediary therefore records its fee as revenue, rather than the full amount collected from the customer.

Revenue is measured at the current value of consideration (paragraph 12 of NAS 2) received or receivable. Where payment is materially deferred, its current value may be below the nominal amount and the difference is recognized as interest income.

When revenue from goods is recognized

Revenue from the sale of goods is recorded only when all NAS 2 conditions are satisfied. The organization checks that:

• the significant risks and rewards of ownership have passed to the purchaser;
• the seller no longer retains continuing managerial involvement or effective control over the goods;
• the amount of revenue can be measured with a high degree of reliability;
• the transaction is likely to produce an economic benefit;
• the costs incurred and expected under the transaction can be measured with a high degree of reliability.

The criteria apply to each transaction and, where necessary, to its separate components. If a product price includes after-sales servicing, the service component is deferred until performance (paragraph 15 of NAS 2), rather than being recognized in full when the goods are delivered.

Payment and recognition are separate events. A prepayment creates a liability to the customer until the sale conditions are met. Conversely, if the goods have been transferred and the criteria are satisfied, the unpaid amount becomes a receivable. If collection becomes uncertain after revenue was recognized, the uncollectible amount is recorded as an expense (paragraph 17 of NAS 2), rather than reducing the revenue originally recorded.

Example. An organization sells equipment together with post-delivery servicing. The component attributable to the equipment is recognized after the risks have transferred and control has ended. The service component remains a liability and becomes revenue in the periods when the service is actually provided. Receipt of the full price in advance does not change that allocation.

When services, interest and royalties are recognized

Revenue from services and work is recognized by reference to the stage of completion at the reporting date if an economic benefit is probable and the revenue, progress and costs can all be measured with a high degree of reliability. This is stage-of-completion recognition (paragraph 18 of NAS 2), rather than recognition on the invoice or payment date.

The stage of completion is established using one of three methods (paragraph 21 of NAS 2):

• analysis of the work performed;
• the proportion of services delivered to the total service volume;
• costs incurred to date as a proportion of total estimated contract costs.

If the result of a service contract cannot be measured with a high degree of reliability, revenue is recorded only to the extent of recoverable costs (paragraph 22 of NAS 2). If recovery of those costs is also unlikely, no revenue is recognized. Interest, royalties and other returns from allowing another party to use assets are recognized under the transaction terms (paragraphs 23–24 of NAS 2) on an accrual basis if the benefit is probable and the amount can be measured with a high degree of reliability.

How expenses are classified

An expense is recorded in the period to which it relates, but the way it is charged depends on its purpose. The Regulation on the Composition of Costs divides costs into four main groups: production cost, period expenses, finance expenses and extraordinary losses.

Future-period expenses have already been incurred but relate to later periods. For example, specified preparatory costs in extractive production are charged evenly or in proportion to output, and the chosen method is stated in the accounting policy.

Borrowing costs are normally recognized as a finance expense for the period (paragraphs 9–10 of NAS 24). The exception is a cost directly attributable to a qualifying asset that takes substantial time to prepare. Capitalization begins when the organization simultaneously incurs expenditure on the asset, incurs borrowing costs and prepares the asset (paragraph 22 of NAS 24) for use or sale.

Documents supporting income and expenses

A primary accounting document records the fact of a transaction or an instruction to carry it out. It is prepared when the transaction occurs or immediately afterwards. If an external document for a current-period transaction has not yet been received, the organization still records the transaction using an appropriate internally prepared primary document; the accounting is reconciled under the prescribed procedure after the external document arrives.

A primary document must contain the transaction details (Article 14 of the Law):

• the organization's name;
• the document name and number, date and place of preparation;
• the transaction description and its physical and monetary measurement;
• job titles and signatures, or other details identifying the responsible persons.

Information from primary documents is accumulated in accounting registers. Registers may be electronic, operate on the double-entry method, and unsupported corrections are prohibited (Article 15 of the Law). Primary documents, registers and financial statements must be kept for at least five years (Article 29 of the Law) after the reporting year.

Accounting records versus tax records

Financial accounting measures results under NAS or IFRS, while tax accounting determines the tax base under the Tax Code. Tax accounting uses financial accounting data (Article 76 of the Tax Code) unless the Code provides a special rule.

For corporate income tax, an expense must be economically justified and documented. Where the timing or method of recognition differs, the tax computation follows the Tax Code rules (Article 305 of the Tax Code). A financial-accounting expense therefore does not always become an immediate tax deduction, and accounting income may require tax adjustments.

An organization conducting activities subject to different tax treatments keeps separate tax records (Article 80 of the Tax Code). Income and expenses must be documented and are allocated directly or, where direct allocation is impossible, in proportion to revenue. The forms of tax registers, responsible officials, cost-allocation methods, depreciation and separate-accounting procedures are stated in the tax accounting policy (Article 77 of the Tax Code).

This article does not list every type of taxable income, non-deductible expense or special tax adjustment. The guide to corporate income tax explains which expenses reduce the tax base and which tax restrictions apply. It becomes relevant after the accounting profit has been determined.

How income and expenses reach the statements

The final income and expense balances determine profit or loss for the period. Annual financial statements include the statement of financial results (Article 22 of the Law), balance sheet, cash-flow statement, statement of changes in equity, and notes, calculations and explanations.

In the notes, an organization discloses its revenue-recognition policy (paragraph 26 of NAS 2), methods for determining the stage of completion of services, and the amounts of material revenue categories from sales, services, interest, royalties and exchange transactions. This enables the statement amounts to be reconciled to the accounting policy and registers.

What changed in 2025–2026

• Resolution PP-282 of 15 September 2025 introduced the public-interest entity category. The register has been electronic since 1 January 2026; an included entity moves to IFRS from 1 January of the following year and, after its second year, prepares and publishes IFRS financial statements with an auditor's report. A legal entity that adopts IFRS voluntarily must give notice by 1 March of the following reporting year.
• Order No. 384 dated 26.06.2026, registered on 24 July 2026 as No. 3400-2, recognized amendments to IAS 1, IAS 7, IAS 12, IAS 21, IFRS 1, IFRS 7 and IFRS 16 for use in Uzbekistan. It took effect upon official publication and applies to organizations reporting under IFRS.

Checks before closing the period

Before closing a period, the organization reconciles contracts, primary documents, registers and account turnovers; separates advances from revenue; checks the transfer of risks for goods and progress on services; allocates costs among assets, production cost and period expenses; and calculates accounting-to-tax differences.

The accuracy of the records is confirmed by a mandatory inventory count (Article 16 of the Law) of assets and liabilities. The head of the organization is responsible for organizing the accounting system (Article 11 of the Law), accounting policy, internal control, completeness of records, document retention, reporting and timely settlements.

Failure to perform those duties, inaccurate accounting information or failure to conduct an inventory count exposes an official to a fine of 1.320.000–3.080.000 (Article 175-1 of the Code of Administrative Liability). A repeat offense within one year is fined at 3.080.000–4.400.000. The multiplier is one BRV, the base calculation unit, and the current wording applies the sanction to the responsible official.

Example. Using the current BRV, the lower and upper bounds of the first fine are calculated as follows: 440.000 × 3 = 1.320.000; 440.000 × 7 = 3.080.000. For a repeat offense, the range is 440.000 × 7 = 3.080.000; 440.000 × 10 = 4.400.000. The page tokens automatically insert the current BRV amount.

Frequently asked questions

Is a customer advance treated as revenue?

No. An advance creates an obligation to deliver goods, perform work or provide a service. Revenue arises only after the recognition criteria for the relevant transaction are met: for goods, after significant risks and rewards have transferred and control has ended; for services, by reference to a supportable stage of completion. Cash receipt and revenue recognition may therefore fall in different reporting periods.

Can an expense be recorded without a supplier document?

If a transaction belongs to the reporting period but the supporting document has not yet arrived, the Law permits it to be recorded using an appropriate internally prepared primary document. That document must contain the required details, description and monetary measurement. After the supplier document arrives, the entry is reconciled and corrected if necessary under the document-flow procedure. The Tax Code's evidence requirements must be checked separately before claiming a tax deduction.

Must an uncollectible receivable reduce revenue?

Not automatically. If revenue was already recognized and collection later becomes uncertain, the uncollectible amount is recorded as an expense rather than an adjustment to the revenue initially recognized. A product return, price change, discount or refusal of services is a different event; its accounting and tax treatment must be determined from the documents and the rules for the relevant period.

Are accounting expenses and tax deductions the same?

Not always. An accounting expense is recognized under NAS or IFRS, while a tax deduction is governed by the Tax Code. The Code may prescribe a different recognition date, cap the deduction or prohibit it. The organization therefore determines its accounting result first and then records tax adjustments in its tax registers. Separate accounting may be required for multiple tax treatments or targeted financing.