scholarly journals Comparability of financial statements prepared according to IFRS and IFRS for SMEs in the field of intangible assets

2010 ◽  
Vol 58 (6) ◽  
pp. 67-78 ◽  
Author(s):  
Hana Bohušová ◽  
Patrik Svoboda
Keyword(s):  
Financial Reporting ◽  
Intangible Assets ◽  
Financial Analysis ◽  
Balance Sheet ◽  
Financial Statements ◽  
Important Field ◽  
Definition Of ◽  
The Impact

IFRS for SMEs were adopted in July 2009 as a result of efforts to harmonize financial reporting for SMEs. These standards are based on the same principles as full standards. The aim is, compared to full IFRS reporting of these businesses, to significantly simplify, mainly from the reason that the strict application of the principles of the full standards does not excessively financially and administratively burden smaller accounting entity. Field of identifying, recording and reporting of intangible assets except goodwill is an important field in which the methodology is substantially different. In the pre­sent paper there is documented on the example the impact of different methods for recording of internally generated intangible assets in the both systems into balance sheet and profit or loss and into the selected indicators of financial analysis. Definition of issues that may arise during the transition from the IFRS for SMEs to full IFRS and vice versa, in the context of drafting the opening balance sheet is another field to which the paper is dedicated.

Instructional Case: Worldwide Shipping Corporation Ltd: Early or Late Adoption of a New International Accounting Standard?

1999 ◽  
Vol 14 (2) ◽  
pp. 211-231
Author(s):  
Peter Lee ◽  
Pearl Tan
Keyword(s):  
Financial Reporting ◽  
Financial Analysis ◽  
Balance Sheet ◽  
Financial Statements ◽  
Economic Consequences ◽  
International Accounting ◽  
Accounting Choice ◽  
Accounting Standard ◽  
The Impact ◽  
International Accounting Standard

The management of Worldwide Shipping Corporation Ltd (hereafter “Worldwide Shipping”) is confronted with a dilemma when a new international accounting standard on leases is introduced which contains a transitional provision allowing firms to defer implementation for a period of four years. Students are required to put themselves in the position of managers who have to weigh the adverse impact of early adoption of the new accounting standard against a responsibility for fair financial reporting. Worldwide Shipping is a multifaceted case that can be used as an accounting case study or a financial analysis study. The objectives of the case are threefold. First, it aims to provide students with a better understanding of the impact of off-balance sheet transactions (in this case, sale-leaseback contracts) on a firm's financial statements. Second, it requires students to examine implications of accounting choice on management compensation and debt-contracting costs, as well as the perplexing problem of recognition in financial statements vs. footnote disclosures. By putting students in the position of managers, the case increases students' awareness of the possible economic consequences arising from accounting choice. Third, it provides students with a useful exercise in the mechanics of effecting a change in accounting method using the retroactive method.

scholarly journals EARNINGS MANAGEMENT AS A MANIPULATIVE FORM OF FINANCIAL REPORTING

2019 ◽  
Vol 34 (5) ◽  
pp. 1323-1328
Author(s):  
Marija Milojičić ◽  
Snežana Knežević ◽  
Aleksandar Grgur
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Financial Analysis ◽  
Balance Sheet ◽  
Financial Statements ◽  
Legal Framework ◽  
Business Decisions ◽  
Accounting Principles ◽  
The Republic

The financial statements, as the end product of the accounting information system, are a structural account of the financial position and financial success of an entity's business over a period. Earnings or net profit indicates an important position in the financial statements and is considered as a measure of a company’s success. Earnings management comes from the accounting skills that executives and business owners use when making business decisions. The Generally Accepted Accounting Principles set out in International Accounting Standards (hereinafter IAS) and International Financial Reporting Standards (hereinafter referred to as IFRS) generally give the owner or manager the choice between several accounting methods within the various stages of the accounting process. One of these methods is creative accounting, which is often correlated with the manipulation of financial statements. Creativity in accounting is known to be legal and to stay within the legal framework, but it is often the case that, with its creativity, it is beyond its boundaries. The way managers exercise this discretion is very important to the quality and objectivity of financial reporting.The tendency of the owners, and then the managers, to show the performance of the company better than they really are, is certainly not new. The reason that in the world from the beginning of the 2000s to the present day, both by the scientific and professional public and by the regulatory bodies in charge of financial reporting, particular attention is paid to this problem are the major political and economic scandals caused by the inaccurate presentation of financial statements. It is considered that manipulative accounting practices are applied in the preparation of financial statements when the application of accounting principles is made with the intention of achieving the desired objective, such as, for example, generating greater profit regardless of whether the procedures selected are in accordance with international and local prescribed rules.The prevalence of manipulation of financial statements depends on the situation in the environment, the quality of the normative basis of financial reporting, the quality of management and the ability of accountants to comply with professional and ethical standards. The environment implies the general economic situation, the existence or absence of appropriate legislation, including its implementation, as well as the relation to tax liabilities.The result of the original empirical research is presented in this paper. The research was conducted in the form of a case study of a domestic business entity (the Republic of Serbia), whose main activity is trade in sports and fashion products. The financial analysis was performed using the Beneish model, which was derived from the official financial statements of the companies, collected from publicly available databases (Balance Sheet and Income Statement 2016-2018) as the basic information base in order to discover the degree of possible manipulation of their own earning capacity. This model has become particularly popular since the Beneish M-scoring model revealed the manipulation of the financial results of the US company Enron, which went bankrupt in 2001.

scholarly journals Pelatihan Pembuatan Laporan Keuangan Bagi UMKM Sebagai Informasi Untuk Pengambilan Keputusan

2018 ◽  
Vol 2 (1) ◽  
pp. 63-82
Author(s):  
Sila Ninin Wisnantiasri ◽  
Irma Paramita Sofia ◽  
Fitriyah Nurhidayah ◽  
Karsam Sunaryo
Keyword(s):  
Financial Reporting ◽  
Business Performance ◽  
Financial Analysis ◽  
Financial Statements ◽  
Financial Statement ◽  
Educational Game ◽  
Financial Report ◽  
Study Approach ◽  
Income Statement ◽  
The Impact

The purpose of this dedication for Pisangan Village Community through financial statement training for small business in collaboration with partners of Citra Kencana Community is to improve the understanding of partners in making financial report especially income statement. The problem facing partners is not mastering how to create a correct financial statement. The financial statements can be used by partners as a benchmark of business performance and business financial analysis tools. Therefore, the methods used in this activity are: (1) convey material about basic concepts of accounting, (2) convey material about components of income statement, (3) provide business simulation and recording financial statements through educational game business accounting (4) the practice of preparing the business income statement and analysis by the entrepreneur, (5) advising / consulting the profit-loss statement. Besides, regression test is done through event study approach to know the impact of training for knowledge of financial report objectives and understanding of financial reporting from the community after getting the training. The result of this activity is increasing both knowledge and understanding of society in making financial report. This is shown by the direction of a positive and significant relationship between training with community knowledge and understanding. Keywords: Financial statement, Small entrepreneurship, Business analysis

Accounting “gets real” in dealing with virtual manufacturing

2005 ◽  
Vol 6 (3) ◽  
pp. 322-338 ◽  
Author(s):  
Mike Tayles ◽  
Margaret Webster ◽  
David Sugden ◽  
Andrew Bramley
Keyword(s):  
Financial Reporting ◽  
Intellectual Capital ◽  
Intangible Assets ◽  
Financial Analysis ◽  
Balance Sheet ◽  
Virtual Manufacturing ◽  
Managerial Accounting ◽  
Content Type ◽  
Market Values ◽  
Virtual Organisation

PurposeOf relatively recent origin is the virtual organisation where companies are able to marshal the necessary competencies from a range of independent external agents through the strategic use of outsourcing mechanisms. The paper discusses the challenge of accounting for intellectual capital (IC) and intangible assets and presents a financial analysis and background of companies exhibiting different levels of virtuality, from traditional manufacturing to virtual manufacturing.Design/methodology/approachThis paper is based on the interaction of the researchers with three companies examining their positions on the continuum from traditional to virtual manufacturing. Case studies of the companies and some key financial results for a period of years are presented in order to explore implications and inform strategic decisions.FindingsIt concludes that conventional financial reporting for IC and intangibles has limited scope. This is elaborated through contrasts in a number of conventional accounting measures and some others, less conventional, to highlight the implications of the intellectual capital employed. The results are reported and implications of these discussed in the context of the companies whose background and activities are briefly outlined.Practical implicationsThe measurement and management of the intangible assets and intellectual capital of organisations has been the focus of recent research in accounting and finance. This has applied to the corporate reporting of financial results involving its impact on the balance sheet, managerial accounting concerned with decisions and the internal use of various financial and non‐financial performance measures and finance where market values of companies have been shown to differ significantly from their book values as shown in published accounts.Originality/valueThe content will be of interest to academics studying issues surrounding the reporting and decision making concerning intellectual capital and intangibles. Additionally, managers and consultants whose companies are engaged in outsourcing and or virtual/semi‐virtual manufacturing should find the results informative.

scholarly journals Assessment of financial stability and payment capacity of Russian companies

2021 ◽  
Vol 12 (2) ◽  
pp. 92-100
Author(s):  
Nikolay M. Tyukavkin ◽  
Vasilisa S. Vasilenko
Keyword(s):  
Financial Reporting ◽  
Financial Management ◽  
Financial Stability ◽  
Financial Analysis ◽  
Balance Sheet ◽  
Financial Statements ◽  
Automatic Generation ◽  
Financial Flows ◽  
Complex Concept ◽  
Software Products

The article discusses the concepts of financial stability, solvency, solvency ratios, financial reporting, financial analysis, liquidity indicators, solvency indicators, balance sheet, report on financial results, considers the advantages of implementing software products for the automatic generation of financial indicators based on financial statements. Financial management is becoming a time-consuming and priority task facing the management personnel of any modern enterprise, regardless of its field of activity. The financial stability of an enterprise is a complex concept that reflects a financial condition in which the enterprise is able to freely dispose of funds, balance financial flows, carry out effective activities in conditions of entrepreneurial risk and a dynamically changing environment, while maintaining solvency, having investment potential and a number of competitive advantages. The system of indicators characterizing the solvency and financial stability of the enterprise is the most important aspect, therefore, this article also discusses the indicators of financial stability, solvency, their calculation procedure, as well as the size and results. Methods for assessing the information contained in the financial statements are determined, examples of calculating the liquidity and solvency ratios of enterprises are given. The ways of increasing the financial stability and solvency of companies are described and considered.

scholarly journals Correction of Accounting Errors through Post Balance Sheet Event Analysis for Romanian Companies

Economies ◽  
2019 ◽  
Vol 7 (2) ◽  
pp. 29 ◽  
Author(s):  
Monica Laura Zlati ◽  
Valentin Marian Antohi ◽  
Petronela Cardon
Keyword(s):  
Risk Model ◽  
Financial Analysis ◽  
Balance Sheet ◽  
Financial Statements ◽  
Risk Profile ◽  
Event Analysis ◽  
Area Of Interest ◽  
The Impact ◽  
Accounting Errors

The study scope is to present the typology of the events analyzed through our research and their impact on the quality of reported financial data. The objectives of the study are to analyze the vulnerability of enterprises according to methodological criteria such as risks and calculations of the risk profile, as well as to establish the necessary measures for correcting the accounting errors based on the conclusions drawn from the analysis. The method used is prospective, financial analysis of the data taken from the financial statements of the companies included in the sample, dynamic for a period of 6 years (2011–2016). Based on the method used, a risk model has been conceptualized to identify the vulnerabilities and risks reported in the financial statements and to define a company risk profile based on which error correction measures can be adopted. Considering the amplitude of the necessary check-ups and the methodology of the imposed accounting treatments, we believe that the topic addressed is a real area of interest for the professional accountants because it organizes the application procedures and limits the impact of errors on the quality of financial reporting in Romania.

scholarly journals Evaluation of financial statements of sports clubs for 2019 and 2020 operational periods in terms of the covid-19 pandemic and research in terms of financial risk

2021 ◽  
Vol 8 (1) ◽  
pp. 118-136
Author(s):  
Adnan Sevim
Keyword(s):  
Financial Reporting ◽  
Financial Risk ◽  
Management Practices ◽  
Financial Analysis ◽  
Financial Statements ◽  
Cash Flows ◽  
Leverage Ratio ◽  
Sports Clubs ◽  
Operational Activities ◽  
The Impact

The Covid-19 pandemic and the accompanying uncertainties deeply affected the activities and financial structures of businesses and caused negative effects on their financial statements in many respects. Sports clubs are at the top of the list of businesses that suffer the most from the negativities of the pandemic process and experience a lot of loss in their financial and operational activities. Considering the developments both in Europe and in the World, the temporary postponement of sports matches, the start of competitions without spectators, the restructuring of club debts have seriously affected sports clubs, which are currently experiencing economic difficulties, deteriorate their liquidity, cash flows and increase uncertainty by making debt payments difficult. In addition, as the impact of risks on future performance increases, risk management practices have gained importance. In this context, information on the current ratio, cash ratio, financial leverage ratio, financing ratio, debt/equity ratio, and financial risk ratio obtained from the financial statement data for the period of 2019 and 2020 were used to evaluate the financial risk levels of 12 sports clubs. The deterioration in the financial structures of the sports clubs most affected by the pandemic process was examined and the risks encountered were discussed. In addition, the comparative financial analysis results were evaluated by analysing the effect of the financial structure and financial reporting of the clubs.

scholarly journals Financial Reporting Impact Of The Operating Lease Classification

2012 ◽  
Vol 28 (6) ◽  
pp. 1509 ◽  
Author(s):  
John Kostolansky ◽  
Dora Altschuler ◽  
Brian B. Stanko
Keyword(s):  
North America ◽  
Financial Reporting ◽  
Balance Sheet ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Financial Accounting Standards Board ◽  
Operating Leases ◽  
The Impact

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are preparing to make changes to accounting standards for leasing that will have a significant impact on the financial statements of a large number of companies. The proposed standard will eliminate the operating lease classification, and if passed, companies using this classification will be required to report additional assets and liabilities on the balance sheet. This study estimates the impact of this change in accounting standards on the financial statements and several key financial ratios for an extensive sample of companies and industries from the Compustat North America database. It is important that users of financial statements understand and are prepared for these changes prior to implementation, particularly for industries in which operating leases are heavily utilized.

scholarly journals The Impact Of The COVID-19 Pandemic On One Of The Biggest Technology Giant Shares: A Financial Analysis On Microsoft Corporation

2021 ◽  
Vol 10 (3) ◽  
Author(s):  
Romina Barrantes ◽  
Thomas Leach
Keyword(s):  
Global Economy ◽  
Swot Analysis ◽  
Financial Analysis ◽  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Health Crisis ◽  
Balance Sheets ◽  
Statement Of Cash Flows ◽  
The Impact

Big technology stocks have been on a roll since April 2020, escaping the consequences of the coronavirus outbreak. The coronavirus pandemic created a vast tailwind for technology giants, especially Microsoft by inciting shifts in the corporations’ behavior which are currently outliving the health crisis. The financial analysis on this firm aimed to develop a thorough analysis centered on its corporate history, market summary, financial statements (income statements, balance sheets, cash flows statements), normalized financial statements (normalized income statement, normalized balance sheet, and normalized statement of cash flows), stock valuation, SWOT analysis, and major competitors’ performance. The aim of the evaluation is to get enough information to construct a thorough evaluation concerning the company’s performance and analyze the effects of the coronavirus pandemic on the company. The evaluation indicated this giant technology company is booming during the pandemic even when the global economy is in a recessionary gap. The financial analysis may suggest further research into.

scholarly journals Intangible Assets Accounting and Reporting Issue

2019 ◽  
pp. 182-193
Author(s):  
Z.-M. Zadorozhnyi ◽  
V. Yasyshena
Keyword(s):  
Financial Reporting ◽  
Intellectual Capital ◽  
Intangible Assets ◽  
Financial Statements ◽  
Additional Line ◽  
Literary Sources ◽  
Accounting Software ◽  
The Impact ◽  
Management Reporting ◽  
Management Report

The article examines the views of foreign economists on the importance of the impact of intangible assets (IA) and goodwill on business. The main purpose of this study is to improve and develop approaches of accounting for IA and goodwill, reflecting them in the financial and management reporting. The systematization of literary sources and the study of regulatory documents showed that there were several problematic issues related to the accounting and reporting of IAs and goodwill that needed elaboration and clarification. The urgency of solving this scientific problem lies in the fact that due to the existence of unresolved issues in accounting for IA and goodwill, as well as the formation of indicators in the financial statements, there is a significant gap between the methodology of accounting for these assets and current requirements of the economy. It is proposed to amend the Methodological Provisions № 417 by allocating the IA into a separate group for more detailed state statistical observation of these assets. It is recommended to separate the subaccount for accounting software showing the detailed information for this subaccount in the Notes to the Annual Financial Statements. To reconcile goodwill with the Plan of Accounts and Reporting, it is offered to set out the title of Section 1 of the Notes to the Annual Financial Statement, as follows: «Intangible Assets and Goodwill». It is recommended to keep records of internal goodwill in managerial and financial accounting, with the separation of the subaccount, with amendments to Section 1 of the Notes to the Annual Financial Statements regarding the inclusion of additional line 095 «Internal Goodwill». For management accounting of IA and goodwill, it is proposed to use the form of internal management reporting, which is based on paragraph 5 «Notes to the Annual Financial Statements», which contains additional indicators that allow the management system to identify IA s both at the respective centres of responsibility and their units, for different periods, to control the amount, direction, deviation of the planned and actual expenses at the receipt of IA, etc. It is recommended to open an additional subaccount for accounting for IAs shortages with the disclosure in the Annex to Methodological Recommendations № 1327 of the procedure for accounting for IAs shortages using this subaccount. It is justified that the Management Report should be considered as a supplement to the financial statements. The management report proposes to disclose the information about the IA and, if available, about goodwill (internal goodwill), and to provide information aimed at the development of intellectual capital. Keywords: brand, internal goodwill, management report, management report, identification, intellectual capital, intangible assets (IA); non-current assets, accounting, managerial reporting, financial reporting.

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