Methodological Approaches to Transformation of Financial Statements under IFRS
Akimova N. S., Aswaye Azaden

Akimova, Natalia S., and Aswaye, Azaden. (2018) “Methodological Approaches to Transformation of Financial Statements under IFRS.” The Problems of Economy 4:286–293.
https://doi.org/10.32983/2222-0712-2018-4-286-293

Section: Economic statistics. Accounting and Auditing

UDC 657.37-044.922

Abstract:
The aim of the study is to identify the current trends in and main ways of harmonizing financial reporting in Ukraine in accordance with international standards. In the article, approaches to the definition of financial accounting and financial reporting prevailing in the domestic and English-language accounting literature are analyzed; improved definitions of financial accounting and financial reporting are proposed. There carried out a comparative analysis of the methods for drafting financial statements under IFRS in order to identify the most optimal one to prepare reporting under IFRS and work out recommendations for further development of the methodology implemented in the framework of the application of this method. The rationale for the expediency of applying the method of translating data from local accounts to IFRS accounts to prepare financial statements under IFRS is formulated and presented. The method involves dividing the concept of translation into direct (transferring data from local accounts to IFRS accounts in full), and partial (transferring individual data from local accounts to IFRS accounts), which allows maintaining a high degree of specification of financial indicators under IFRS and ensures the accuracy and efficiency of their formation, makes it possible to build an effective system of management accounting. The use of the method of translation for the purpose of the formation of financial statements under IFRS allows to a certain extent avoiding drawbacks of such methods of preparing financial statements under IFRS as parallel accounting and the method of transformation. At its core, the application of the translation method is an organization of quasi-parallel accounting, in which accounting data, if they meet IFRS requirements, are transferred to IFRS accounts without subsequent transformations. The proposed methodology for the preparation of financial statements under IFRS allows a company to collect and compile information for preparing reports in international format with the lowest input of labor and financial resources, which fundamentally affects efficiency of management decisions.

Keywords: financial accounting, financial statements, conversion, transformation, IFRS.

Fig.: 2. Tabl.: 1. Bibl.: 17.

Akimova Natalia S. – Candidate of Sciences (Economics), Professor, Professor, Department of Accounting, Audit and Taxation, Kharkiv State University of Food Technology and Trade (333 Klochkіvska Str., Kharkіv, 61051, Ukraine)
Email: akimovans@ukr.net
Aswaye Azaden – Postgraduate Student, Department of Accounting, Audit and Taxation, Kharkiv State University of Food Technology and Trade (333 Klochkіvska Str., Kharkіv, 61051, Ukraine)
Email: ezzdeenali0@gmail.com

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