Assessment of enterprises liabilities in application conditions of international financial reporting standards

Valentina Kubik
Senior Lecturer, Department of Accounting and Auditing, Оdessa National Economic University, Ukraine, e-mail: kybik290162@gmail.com, ORCID ID: https://orcid.org/0000-0002-5948-1385

Ruslan Volchek
PhD in Economics, Associate Professor, Department of Accounting and Auditing, Оdessa National Economic University, Ukraine, e-mail: ruslan1981196@ukr.net, ORCID ID: https://orcid.org/0000-0002-3741-1458

Cite this article:

Kubik, V., Volchek, R. (2020). Assessment of enterprises liabilities in application conditions of international financial reporting standards [Otsinka zoboviazan pidpryiemstv v umovakh zastosuvannia mizhnarodnykh standartiv finansovoi zvitnosti], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 3-4 (74-75), pp. 45–56.

Abstract

The article considers the peculiarities of accounting assessment of short-term and long-term liabilities of enterprises based on different types of current value. It is established that the IAS and Ukrainian Accounting Standards don’t quite clearly formulate the provisions regarding the assessment at which accounting items should be evaluated when recognized and reflected in the balance sheet. This negatively affects to the quality of the reports provided by enterprises and requires the development of methodologies that specify the application of different types of assessment of enterprises liabilities, depending on the purpose of assessment. The subject of research is the procedures for evaluation the value of the enterprise’s liabilities. The purpose of the article is to solve the problem of enterprises liabilities evaluation at the present stage of accounting development in the context of international financial reporting standards application in Ukraine. The research methods are general scientific, namely: abstraction and concretization – for providing recommendations regarding the correct determination of the fair value of enterprises’ liabilities. It is proved, that the choice of the evaluation type of liabilities depends on the time of their implementation and the results of business negotiations. Recommendations for the correct evaluation of liabilities and disclosure information about them in the financial statements are formulated. It is recommended to reflect in the order of enterprise accounting policy the criteria according to which the discount rate is selected for determining the present value of various types of long-term liabilities. It is expedient to substantiate the materiality of the rate deviation on long-term interest loans in accordance with the terms of the agreements and the market interest rate. Indicators that can be used to determine the risk premium when choosing the discount rate are specified.

Keywords

liabilities of the enterprise; accounting valuation; discounting; fair value.

JEL classification: M410; M480; DOI: https://doi.org/10.33987/vsed.3-4(74-75).2020.45-56

UD classification: 657:37:006.032

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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