Advertisement

Accounting Policies, Accounting Estimates and Its Role in the Preparation of Fair Financial Statements in Digital Economy

  • Denis Lugovskу
  • Mikhail KuterEmail author
Conference paper
Part of the Lecture Notes in Networks and Systems book series (LNNS, volume 78)

Abstract

The paper considers the main problems and limitations of the reliable presentation of reporting information. Ensuring the reliability of accounting information is objectively hampered by its conventionality associated with the need to give a numerical estimate of accounting objects. Subjective limitations are connected with a variety of information needs of users of reporting data, which determine differences in accounting methodology. The accounting conventionality is most evident when calculating the financial result, therefore one of the priority problems in forming reliable financial statements is the accuracy problem of financial result calculation. Equally important is the problem of recognition of contingent and evaluation assets as well as liabilities. The choice of accounting methodology at the level of accounting standards or at the level of an economic entity has a decisive influence on the reporting data presented to users: the same business transactions can be presented in completely different ways. The choice of the degree of freedom provided to economic entities during the preparation of reporting lies in the area of the distinction between global and local accounting policies. In addition, reliability of financial statements is influenced by many other factors related to the choice of accounting and depreciation policies, changes in accounting estimates, legal justification of accounting entries and many others that are also considered in the paper.

Keywords

Accounting policy Global accounting policy Local accounting policy Professional accounting judgement Accounting estimates Contingent assets Contingent liabilities Financial statements 

References

  1. 1.
    Needles, B., Powers, M., Crosson, S.: Financial and Managerial Accounting. Houghton Mifflin Company, Boston (2007)Google Scholar
  2. 2.
    Kuter, M., Lugovsky, D., Ponokova, D.: The reserving as a way of risk hedging. Financ. Credit 34(238), 40–46 (2006)Google Scholar
  3. 3.
    Zack, G.: Fair Value Accounting Fraud. New Global Risks and Detection Techniques. Wiley, Hoboken (2009)Google Scholar
  4. 4.
    Sher, I.: Accounting and balance. Economic Life. Moscow (1926)Google Scholar
  5. 5.
    Hendriksen, E., van Breda, M.: Accounting theory. Richard D. Irwin. Homewood, IL (1992)Google Scholar
  6. 6.
    Cairns, D., Massoudi, D., Taplin, R., Tarca, A.: IFRS fair value measurement and accounting policy choice in the United Kingdom and Australia. Brit. Acc. Rev. 43(1), 1–21 (2011)CrossRefGoogle Scholar
  7. 7.
    Alexander, D., Bonaci, C., Mustata, R.: Fair value measurement in financial reporting. Procedia Econ. Financ. 3, 84–89 (2012)CrossRefGoogle Scholar
  8. 8.
    Efimova, O., Rozhnova, O.: The corporate reporting development in the digital economy. In: Antipova, T., Rocha, A. (eds.) Digital Science. DSIC18 2018. Advances in Intelligent Systems and Computing, vol. 850, pp. 71–80. Springer, Cham (2019)Google Scholar
  9. 9.
    Kuter, M.: Introduction to accounting. Education-South. Krasnodar (2013)Google Scholar
  10. 10.
    Lugovsky, D.: Accounting policies and estimate standards: essence, content, interconnection. Bull. Adyg. State Univ. Episode 5 Econ. 2(141), 98–106 (2014)Google Scholar
  11. 11.
    Bloom, R.: Conservatism in accounting: a reassessment. Acc. Hist. J. 45(2), 1–15 (2018)Google Scholar
  12. 12.
    Kuter, M., Lugovsky, D., Mamedov, R.: Depreciation policy is an accounting policy element to ensure the financial strategy of the owner. Econ. Anal. Theory Pract. 29(158), 17–23 (2009)Google Scholar
  13. 13.
    Grishkina, S., Sidneva, V., Shcherbinina, Y., Dubinina, G.: Comparability of financial reporting under different tax regimes. In: Antipova, T., Rocha, A. (eds.) Digital Science. DSIC18 2018. Advances in Intelligent Systems and Computing, vol. 850, pp. 88–93. Springer, Cham (2019)Google Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Kuban State UniversityKrasnodarRussia

Personalised recommendations