Mongolia’s new Accounting and Auditing Laws

• The following types of entities must follow IFRS:
• The following types of entities should follow IFRS for SMEs if they are duly registered as SMEs with the central state administration organization in charge of small and medium enterprises:

1. Any joint stock companies listed in a local or international stock exchange
2. A company that has applied for a listing in a local or international stock exchange
3. Eintities that hold licenses stipulated in Articles 15.2, 15.3, 15.4; 15.10.5, 15.10.6 and 15.10.13 of the Law on Licensing of Business Activities
4. State or locally owned entities and entities in which they have ownership participation
5. Public service entities that supply electricity, water or heating
6. Political parties and non-governmental organisations performing governmental functions on a contractual basis in accordance with Article 19 of the Law on Government of Mongolia
7. A business entity operating in the sectors of commercial banking, as a special purpose company or investment funds

As part of the Government’s reform program, two new laws that impact companies came into effect on 1 January 2016, as follows:

• Accounting Law issued on 19 June 2015 and effective 1 January 2016
• Auditing Law issued on 19 June 2015 and effective 1 January 2016

These laws complete  the financial reporting framework for companies, when taken together with the Company Law issued on and effective since 6 October 2011, and the Small and Medium Enterprises (SME) law issued on and effective since 27 July 2007.

This publication covers the key articles of the Accounting and Auditing laws relevant to for-profit entities as a quick reference guide, while referring to the Company and SME laws, when relevant.

In addition, we highlight certain sections of the Accounting Law that would appear to conflict with that law’s requirement for companies to apply International Financial Reporting Standards (IFRS).

Download Mongolia’s new Accounting and Auditing Laws