A practical model to implementing IFRS in the national accounting system: The case of Azerbaijan

Akif Valiyev,Arif Huseynov,Ilham Huseynov,Nushaba Gadimli,Abasov Elmar

doi:10.15549/jeecar.v8i4.836

Abstract

The purpose of this article is to develop a methodological approach to substantiating the effective consolidation model of national accounting standards (NAS) with International Financial Reporting Standards (IFRS) for Azerbaijan. Using the questionnaire method, the advantages, and obstructions of IFRS implementation in Azerbaijan have been assessed, depending on the practicing models of consolidation of NAS and IFRS. Using fuzzy sets made it possible to determine the levels of development of advantages and obstructions associated with the introduction of IFRS into national accounting practice in Azerbaijan. We determined the most effective model of consolidation of NAS and IFRS for the enterprises of Azerbaijan. The effectiveness of implementing models for the consolidation of NAS and IFRS has been assessed to provide a balance between advantages and destructive factors in the implementation of IFRS.

Highlights

The sale of traditional energy resources for a long time has remained the defining driver of the functioning of the Azerbaijan’s national economy
The average scores for the sample of respondents of the degree of manifestation of advantages and obstructions in implementing models of consolidation of national accounting standards (NAS) with International Financial Reporting Standards (IFRS) in Azerbaijan are given in Tables 1 and 2
The justification of the advantages of IFRS and the system of destructive factors of influence on their implementation to NAS made it possible to conclude that the most effective model is the convergence of NAS and IFRS for all companies in Azerbaijan

Summary

Introduction

The sale of traditional energy resources (mainly oil and gas) for a long time has remained the defining driver of the functioning of the Azerbaijan’s national economy. The trade turnover of oil and gas alone accounts for about 80% of the total volume of Azerbaijan exports of. Because of this worldwide long-term climate neutrality strategy, the prospects for energy resources as the primary source of the state budget and exports become uncertain. This puts the development of the national economy at risk. The solid and prolonged volatility in crude oil prices in the global energy market in 2014 and 2020 has strengthened the arguments about the vulnerability of the country's economy and the urgent need for its diversification as soon as possible (Trading Economics, 2021; Yasmin, El Refae & Eletter, 2020)

Objectives

Methods

Discussion

Conclusion