The Federal Law dated 29.12.2020 No. 476-FZ introduced the amendments to the Law «On audit activities» concerning the conditions for the mandatory audit of financial statements.

According to the amendments, starting from January 1, 2021, the financial indicators below, exceeding the threshold values of which is the basis for conducting the mandatory audit, were increased:

- revenue - from 400 to 800 million RUB;

- assets of the balance sheet - from 60 to 400 million RUB.

Thus, the opportunities for accounting under the simplified procedure by small businesses that have this right are expanded, with the exception of companies with the indicators listed above.

In addition, nonprofit organizations are exempt from the mandatory audit if at least one of the following conditions is met:

• compliance with the above limits on revenue and assets of the balance sheet;
• founded as funds with property, including cash, not exceeding 3 million RUB;
• nonprofit organizations which are consumer cooperative societies, the activities of which are regulated by the Federal Law dated 19.06.1992 No. 3085-1 "On consumer cooperation (consumer societies, their unions) in Russian Federation".

According to data of the Information and Analytical system Globas, in Russia, there are more than 6 thousand small businesses that meet the updated financial criteria for conducting the mandatory audit of 2019 financial statements.

Information agency Credinform represents a ranking of the largest Russian companies meeting the tax monitoring criteria.

Companies with the largest volume of annual revenue meeting the updated criteria of tax monitoring (TOP-1000) were selected for the ranking, according to the data from the Statistical Register and the Federal Tax Service for the latest available periods (2014 - 2019). The selection and analysis of companies were based on the data of the Information and Analytical system Globas.

Net assets are total assets less total liabilities. This indicator reflects the real value of the property of an enterprise. When the company’s debt exceeds the value of its property, the indicator is considered negative (insufficiency of property).

The largest company in term of net assets is JSC ROSNEFTEGAZ, INN 7705630445, Moscow. In 2019, net assets value of the company almost amounted to 3 939 billion RUB.

The lowest net assets value among TOP-1000 belonged to JSC ANTIPINSKY REFINERY, INN 7204084481, Tyumen region. The legal entity is declared insolvent (bankrupt) and bankruptcy proceedings are initiated, 04.01.2020. In 2019, insufficiency of property of the legal entity was indicated in negative value of -223 billion RUB.

Covering the six-year period, the average net assets values of TOP-1000 have a trend to increase with a decreasing growth rate (Picture 1).

Picture 1. Change in industry average net assets value in 2014 – 2019

Over the past six years, the share of companies with insufficient property had a positive trend to decrease (Picture 2).

Picture 2. Shares of TOP-1000 companies with negative net assets value in 2014-2019

Sales revenue
In 2019, the revenue volume of ten largest companies of the industry was 10% of total TOP-1000 revenue (Picture 3). This is indicative of low level of aggregation of capital in the industry.

Picture 3. The share of TOP-10 companies in total 2019 revenue of TOP-1000

In general, there is a trend to increase in revenue with the decreasing growth rate (Picture 4).

Picture 4. Change in industry average net profit in 2014 – 2019

Profit and loss
The largest organization in term of net profit is JSC MMC NORILSK NICKEL, INN 8401005730, Krasnoyarsk territory. The company’s profit for 2019 amounted to 15 billion RUB.

Covering the six-year period, there is a trend to increase in average net profit with the decreasing growth rate (Picture 5).

Picture 5. Change in industry average net profit (loss) values in 2014 – 2019

For the six-year period, the average net profit values of TOP-1000 have the increasing trend with the decreasing net loss (Picture 6).

Picture 6. Change in average net profit and net loss of ТОP-1000 in 2014 – 2019

Key financial ratios
Covering the six-year period, the average values of the current liquidity ratio were within the recommended one - from 1,0 to 2,0 with a trend to increase (Picture 7).

Current liquidity ratio (current assets to short-term liabilities) shows the sufficiency of company’s assets to repay on short-term liabilities.

Picture 7. Change in industry average values of current liquidity ratio in 2014 – 2019

Covering the six-year period, the average values of ROI ratio have a trend to increase (Picture 8).

ROI ratio is calculated as net profit to sum of shareholders equity and long-term liabilities, and shows the return of equity involved in commercial activities and long-term borrowed funds.

Picture 8. Change in industry average values of ROI ratio in 2014 – 2019

Assets turnover ratio is the ratio of sales revenue and company’s average total assets for a period. It characterizes the effectiveness of using of all available resources, regardless the source of their attraction. The ratio shows how many times per year the full cycle of production and circulation is performed, generating the corresponding effect in the form of profit.

Covering the six-year period, business activity ratio demonstrated the increasing trend (Picture 9).

Picture 9. Change in average values of assets turnover ratio in 2014 – 2019

Small business
Only one company of TOP-1000 is registered in the Register of small and medium-sized enterprises of the Federal Tax Service of the Russian Federation. Its share in total revenue of TOP-1000 is 0,03%.

Main regions of activity
Companies of TOP-1000 are registered in 67 regions of Russia, and unequally located across the country. Over 55% of companies largest by revenue are located in Moscow, Moscow region and Saint Petersburg (Picture 10).

Picture 10. Distribution of TOP-1000 revenue by regions of Russia

Financial position score
Assessment of the financial position of TOP-1000 companies shows that more than a half of them have financial position above average (Picture 11).

Picture 11. Distribution of TOP-1000 companies by financial position score

Solvency index Globas
Most of TOP-1000 companies got Superior / High and Strong / Medium indexes Globas. This fact shows their limited ability to meet their obligations fully (Picture 12).

Picture 12. Distribution of TOP-1000 companies by solvency index Globas

Conclusion
Complex assessment of activity of the companies meeting the tax monitoring criteria, taking into account the main indexes, financial ratios and indicators, demonstrates the prevalence of positive trends in 2014 - 2019 (Table 1).

Table 1. Positive and negative trends, evaluation factors

Trends and evaluation factors	Relative share of factors, %
Dynamics of the average net assets value	10
Rate of growth (decrease) in the average size of net assets	-10
Increase (decrease) in the share of enterprises with negative values of net assets	10
Level of competition / monopolization	10
Dynamics of the average revenue	10
Rate of growth (decrease) in the average size of revenue	-10
Dynamics of the average profit (loss)	10
Rate of growth (decrease) in the average profit (loss)	-10
Growth / decline in average values of companies’ net profit	10
Growth / decline in average values of companies’ net loss	10
Increase / decrease in average values of total liquidity ratio	5
Increase / decrease in average values of return on investment ratio	10
Increase / decrease in average values of asset turnover ratio, times	10
Share of small and medium-sized businesses in terms of revenue being more than 22%	-10
Regional concentration	-10
Financial position (the largest share)	10
Solvency index Globas (the largest share)	10
Average value of relative share of factors	3,8

positive trend (factor), negative trend (factor)