International Accounting Standards Research Articles

Impact of Cost of Capital on European Economic Growth: The Role of IFRS Mandatory Adoption

Since 2005, the International Financial Reporting Standards (IFRS) mandatory adoption in the European Union has played a pivotal role to reduce financing costs which has influenced positively economic growth across member states. Thus, this study examines the effect of Cost of Capital on Economic Growth under IFRS mandatory adoption in 17 European countries between 1994 and 2021 using Pooled Mean Group Autoregressive Distributed Lag (PMG-ARDL) and System Generalized Method of Moments (GMM-system) methods. The findings reveal a positive correlation between the Cost of Capital and Economic Growth under IFRS adoption. Specifically, the model estimates indicate that the Cost of Capital contributes to a 0.58% increase in Economic Growth in the PMG-ARDL framework. Moreover, the GMM-system model underscores the significance of IFRS adoption in reducing the Cost of Capital, leading to a 0.52% increase in Economic Growth. These results provide insights into the benefits of adopting international accounting standards and highlight the importance of institutional and financial factors in shaping the economic impact of adopting accounting standards.

Analysis of existing rules and practices for disclosing information about fair value in financial statements

One of the most important for modern accounting and reporting is fair value. Moreover, this is typical for systems of both Russian and international standards (hereinafter referred to as RAS and IFRS). Indeed, fair value, which is actively used in IFRS, has now been introduced into almost all domestic federal accounting standards (hereinafter referred to as FAS). In this regard, the importance of issues related to the indicated value cannot be overestimated. In our previous works, we explored issues related to the interpretation and calculation of fair value. In this article we turn to the analysis of disclosure of information about fair value in financial statements. When carrying out research, methods such as analysis and synthesis, grouping method, comparison, analogy method, logical approach, systematic approach were used. As a result of the research carried out in this work, the main problems associated with the disclosure of information on fair value in the reporting of modern organizations have been identified. The results obtained in this article will be useful to a wide range of readers interested in current issues related to the preparation of financial statements under RAS and IFRS; they can be used in the educational process of higher educational institutions, in the practical work of accounting departments of modern organizations, as well as in the development and improvement of relevant domestic and international accounting standards.

IPO conditional conservatism, underpricing and post-issue stock market survival

PurposeWe examine the association between conditional conservatism in initial public offering (IPO) underpricing and post-issue stock market survival in the U.S.Design/methodology/approachWe adopt an archival approach by collecting data for 1,761 U.S. IPO issuers for the period 1990–2017. Regression analyses are conducted to evaluate the association between conditional conservatism in initial public offerings with underpricing and post-issue stock market survival. We identify firms that went public in the period 1990–2012. These firms are then followed for five years after the IPO to assess their stock market survival.FindingsWe find that pre-issue conditional conservatism is significantly associated with less IPO underpricing. We also detect that IPO firms with higher levels of conditional conservative reporting are more likely to survive in the post-IPO stock market in the three-, four-, and five-year periods after the IPO. Our main findings are robust after controlling for other factors in our models, such as IPO cycles, venture capitalists, research and development investment, and pre-IPO accounting performance.Originality/valueWe extend research by demonstrating that conditional conservative reporting practices help firms reduce their indirect costs of raising their initial public capital. Additionally, our research introduces new evidence on the association between pre-IPO conditional conservatism and after-issue stock market survival. Our findings empirically support the International Accounting Standards Board’s (IASB) decision to reintroduce the concept of prudence into the conceptual framework, by showing how conservative reporting can reduce information asymmetry in IPO firms.

Taxable Business Income in Palestine: Tax Treatment in Palestine for Depreciation Expense for Assets vs. Accounting Treatment According to International Accounting Standards

Accounting is the source of information that any facility's relevant body requires in order to make economic judgments because it arranges the facility's financial reports regularly. The administration, for example, benefits from financial accounting findings because it uses them to plan, direct, and supervise financial operations. Additionally, it oversees and decides on the affairs of lenders, investors, governmental organizations, and scientific research institutions [3] There is a need for unified accounting standards to govern measuring and releasing information whenever financial reports are made in the age of globalization, the expansion of global marketplaces, and the beginning of the industrial revolution. Beneficiaries will be able to quickly compare them to assess and evaluate financial reports and make the most accurate decisions. In 1973, the International Accounting Standards Committee (IASC) issued the first international standards, the International Accounting Standards (IAS). They also wanted to make global business comparisons easier, increase transparency, and restore faith in financial reports. Later, the International Financial Reporting Standards (IFRS) replaced the International Accounting Standards (IAS) [9]. Moreover, the primary goals of commercial accounting and taxation are not the same. The former requires a straightforward representation of the actual data because it involves gathering information to monitor and make decisions; the latter—even though its primary goal is to increase revenue is frequently employed as a tool for the state's economic and social objectives [16]. The taxation reconciliation process often begins with the financial report's 'net income before taxation', unless there are special purpose financial reports that directly result in 'net [taxable] income'. Subsequently, this value is modified by a range of factors to provide 'net income' [6]. Net profit prepared according to international accounting standards, amending reports based on the approved income tax act to account for any liabilities in Palestine. The purpose of the research is to identify issues in the computation of taxable income in Palestine about which assessors and taxpayers have different opinions in Calculating the issue of depreciation assets and what is tax-recognized and what is not tax-accepted.

Challenges and Opportunities for the Implementation of a Unified Accounting System in Pakistan: A Survey Study

This research aims to establish the effects of a Unified Accounting System (UAS) on foreign investors’ trust in Pakistan's FDI decision by evaluating the accounting information’s completeness, transparency, consistency, and timeliness. A quantitative survey design was used, and the research instruments included a structured questionnaire with 27 statements about UAS and its impact on FDI. The survey was conducted on the working population of professionals in different organizations in Pakistan and adopted a minimum sample of 90 working people with a stratified random sampling method. Specifically, the study reveals a positive attitude towards implementing UAS in Pakistan, consequently maintaining compliance with international accounting standards and improving the nation’s appeal to foreign investors. The commitments underpin the need for detailed and, where possible, public and up-to-date accounting information that can contribute to a good investment environment. The paper offers significant policy implications for the Pakistani context and any underdeveloped country seeking to enhance its investment climate structures through sound accounting practices.

Features of forming the enterprise’s balance according to international financial reporting standards

The formation of market relations and the aggravation of the economic situation in Ukraine require new approaches to enterprise management. The basis for decision-making on all issues of the company's activity is financial information necessary for a complete and comprehensive analysis of the state of its assets, liabilities and equity. The main source of information is financial reporting. The value of the balance sheet as the main reporting form cannot be overestimated, as it allows you to have an idea of the property and financial situation of the enterprise. The purpose of the paper is to research the peculiarities of the formation of the enterprise's balance sheet according to international standards. Also, the analysis of the formation of the balance sheet according to the National Accounting Regulations and in accordance with international standards. Therefore, the balance sheet is a system of indicators that characterizes the wide value ratio of the company's funds. The balance reflects the composition, placement, use and sources of funds of enterprises, organizations and budgetary institutions. The paper examines the peculiarities of forming a company's balance sheet in accordance with international standards. Specifically, it focuses on key aspects that define the process of preparing financial statements in accordance with international accounting standards. The authors explore the impact of international standards on balance sheet formation, including aspects such as asset and liability valuation, reporting on current assets, financial instruments, and more. It is noted that the adoption of international standards requires companies not only to comply with new rules but also to review and improve their internal processes and management systems. The study also highlights the advantages and challenges associated with the implementation of international standards in the practice of corporate accounting. The final recommendations of the paper emphasize the importance for companies to study and implement international standards in order to enhance their competitiveness and financial reporting transparency.

PROSPECTS FOR REGULATION OF ACCOUNTING AND TAXATION OF VIRTUAL ASSETS IN UKRAINE

Introduction. The advent of virtual assets has brought both challenges and opportunities, reshaping global financial systems and necessitating updated regulatory, accounting, and taxation frameworks. Ukraine stands at a critical juncture, integrating these digital innovations into its legal and financial infrastructure while aligning with global standards. Purpose. This article aims to provide a thorough examination of Ukraine’s developing frameworks for the regulation, accounting, and taxation of virtual assets. It assesses the effectiveness of current strategies and identifies areas for enhancement to ensure a robust integration of virtual assets into Ukraine's financial system. Methods. The research employs a comparative analysis method, juxtaposing Ukraine's frameworks with global standards. This approach is supported by a review of recent academic literature and regulatory reports, offering a comprehensive perspective on the adaptation processes and methodologies applied in the integration of virtual assets. Results. The findings reveal that while Ukraine has made significant progress, particularly with the adoption of the "Law on Virtual Assets," gaps remain in fully securing a stable and transparent virtual asset market. The study highlights the need for continual regulatory updates and the adoption of international accounting standards to manage the complexity and volatility of virtual assets. Conclusion. Ukraine’s proactive regulatory adaptations position it to potentially lead in the integration of virtual assets globally. Continued alignment with international standards and responsive updates to regulatory frameworks are essential to harness the economic benefits and mitigate associated risks. This ongoing evolution will support Ukraine's strategic positioning in the global digital economy and foster a stable environment for innovation and investment in virtual assets.

Intangible and Tangible Investments and Future Earnings Volatility

This study delves into the impact of intangible and tangible investments on future earnings volatility within the European financial market context. Drawing from International Accounting Standards (IAS) 16 and 38, we examine the intricate relationship between fixed assets, expenses, and the uncertainty surrounding forthcoming earnings. Our analysis reveals that intangible assets, often associated with heightened uncertainty and risk, contribute to increased earnings volatility compared to capital expenditures. Furthermore, we find that capitalizing intangible assets serves to alleviate uncertainty, resulting in lower earnings volatility compared to expensing them. Our exploration of industries’ effects further reinforce these findings, with the effect of intangible and tangible investments on earnings volatility being more pronounced in high-tech industries than in low-tech industries. Additionally, our robustness test, utilizing goodwill as a proxy for intangible assets and property, plant, and equipment as a proxy for tangible assets, yields consistent results, further bolstering our findings.

A STUDY ON FIXED ASSET MANAGEMENT

Fixed assets management is an accounting process that seeks to track fixed assets for the purposes of financial accounting, preventive maintenance, and theft deterrence. According to International Accounting Standard (IAS), Fixed Assets are assets whose future economic benefit is probable to flow into the entity, whose cost can be measured reliably. Fixed Asset management is crucial to the accounting process in any business. It can be difficult to find the time and the tools to devote the needed attention to assets that they deserve. The truth is that a company’s assets are the largest investments most companies make. Sound management of assets can yield substantial tax savings in depreciation deductions. Without thorough management of assets, the accuracy of financial reports will be threatened and there will be a negative impact on your bottom line. Establishing the highest standards of depreciation accuracy and best practices in fixed asset management will pay off in the form of savings and efficiency.

Adoption of Accrual Accounting in the Brazilian Public Sector: a Case Study in Light of Regulation Theory

Objective: To identify existing gaps in the adoption of full accrual accounting in the public sector, with a focus on analyzing the financial statements of the Ministry of Defense (MD), and to investigate the application of accrual accounting in the public sector, considering its complex regulations. Theoretical Framework: For the analyses, the theoretical foundation is based on the theory of regulation applicable to accounting regimes in the public sector. Methodology: The research, using the Ministry of Defense (MD) as a case study, adopted a multifaceted methodological approach, including a case study, literature review, and documentary analysis. Data sources included books, dissertations, scientific articles, and legislation. Documentary analysis focused on the MD's Financial Statements, accessed through the government portal, covering the years 2018 to 2022. The research also employed content analysis techniques, following the methodology suggested by Sampaio and Lycarião (2021), to evaluate the content of the information in relation to the established objectives. Results and Conclusions: The research identified that there is already partial adherence of the public sector to international standards, as the cash basis is still observed for revenues, and areas for improvement were noted, such as the adoption of the Statement of Comprehensive Income in the context of the public sector. Research Implications: It was observed that regulatory changes are important instruments for influencing the accountability processes of the public sector. Originality/Value: The research emphasizes the partial adoption of international public accounting standards and suggests further discussions and analysis to achieve complete adherence, confirming a gap between the implementation of standards and their practical application.

War and Financial Statements: Assessing the Impact of the Russia-Ukraine Conflict on International Accounting and Reporting Standards

Purpose: This study aims to assess the impact of the Russia-Ukraine conflict on international accounting and reporting standards. The focus is on understanding how geopolitical tensions influence regulatory divergence, enforcement challenges, financial reporting practices, and market dynamics. Research Design and Methodology: A qualitative methodology was employed, involving a systematic review of scholarly articles, books, reports, and other academic sources. Data were collected from comprehensive searches on databases like Google Scholar and JSTOR, with thematic analysis used to identify recurring themes and patterns. Triangulation, member checking, and reflexivity ensured the validity and reliability of the findings. Findings and Discussion: The findings reveal that the Russia-Ukraine conflict exacerbates regulatory divergence, complicates enforcement of international accounting standards, and increases complexities in financial reporting. Geopolitical tensions lead to fragmented regulatory responses, undermining efforts toward harmonization. Corporations adopt enhanced risk disclosures and conservative reporting approaches to navigate uncertainties and reassure stakeholders. Investor sentiment and market perceptions are significantly influenced, resulting in increased market volatility and shifts in investment strategies. Implications: This study highlights the need for adaptive regulatory responses and collaborative efforts to promote harmonization of accounting standards. Technological innovations, such as blockchain and artificial intelligence, offer promising avenues for enhancing regulatory compliance and transparency. The findings underscore the importance of interdisciplinary research and longitudinal studies in informing policy interventions, corporate strategies, and regulatory reforms, promoting financial stability, transparency, and resilience in conflict-affected environments.

THE IMPACT OF APPLYING INTERNATIONAL STANDARD NINE ON THE QUALITY OF ACCOUNTING INFORMATION

There is an increasing need to find professional institutions that sponsor the work of companies in the financial and accounting fields due to the changes and developments taking place in the economic environments. Hence, the International Accounting Standards Board - IASB, which includes many other sub-boards like the Financial Accounting Standards Board - FASB, has issued many scientific publications in financial and accounting fields. Furthermore, the International Accounting Standards Board, through its sub-boards, including the Financial Accounting Standards Board, has formulated several International Financial Reporting Standards ( IFRS ) to improve the quality of financial reporting and the transparency of the information it contains in a globally applicable and accepted manner. This information would reflect the current situation of economic institutions in terms of performance and financial position in response to changes in economic environments, and to meet the needs of This framework will be applied consistently across transactions, industries, and capital markets to improve the comparability of financial data between economic institutions operating in the same sector globally and within a comprehensive, unified, and stable framework.

OBSERVATIONS ON THE STATEMENT OF CASH FLOWS

Cash flow management requires clear information, which is compiled by organizations in accordance with international accounting standards. However, from the point of view of decision-making, the published cash flow reports are not always fully usable by the stakeholders. The article presents the possibilities of making decisions on cash flows and the ways of increasing companies financial stability based on it.

THE ROLE OF INTERNATIONAL ACCOUNTING STANDARDS IN FOSTERING CORPORATE REPORTING TRANSPARENCY

This research investigates the multifaceted impact of International Accounting Standards (IAS) on corporate reporting transparency. Amidst the interconnected global business landscape, the study aims to discern global adoption trends, financial reporting quality, stakeholder perceptions, implementation challenges, and the responsiveness of IAS to industry dynamics. Through meticulous analyses spanning the years 2010 to 2020, the research unfolds key insights.The adoption of IAS is a critical facet of global financial reporting, influencing business practices, investor decisions, and regulatory frameworks. Understanding its impact is paramount for policymakers, standard-setters, and businesses navigating an increasingly interconnected and diverse financial ecosystem.This research seeks to comprehensively examine the intricate relationship between IAS and corporate reporting transparency. By delving into adoption trends, financial metrics, stakeholder perspectives, implementation challenges, and update responsiveness, the study aims to provide a holistic view of the global accounting landscape.The analysis reveals a consistent upward trajectory in global IAS adoption, with North America and the Asia-Pacific region playing pivotal roles. Financial reporting quality experiences substantial improvements, particularly benefiting smaller enterprises. Stakeholder perceptions vary across regions and professional roles, emphasizing the need for tailored communication strategies. Implementation challenges, including legal framework complexities and cultural differences, underscore the intricate nature of global adoption. The frequency of IAS updates showcases the adaptability of standards to emerging trends, emphasizing sector-specific implications.This research concludes that IAS significantly influences corporate reporting transparency, offering a standardized framework for diverse business scales. Challenges in implementation necessitate targeted interventions, with recommendations focusing on stakeholder communication, tailored support for small enterprises, and addressing legal and cultural complexities. The adaptability of IAS to industry dynamics reaffirms its role as a responsive and evolving standard. As businesses, regulators, and standard-setters move forward, continuous collaboration and flexibility become imperative for navigating the complexities of a globally harmonized financial reporting landscape.

공시연구의 네트워크 중심성 분석

[Purpose] This study aimed to examine the direction of domestic research through text analysis using a qualitative method rather than an empirical study in the name of ‘public disclosure’, targeting domestic research that is mostly empirical research. [Methodology] This study conducted frequency analysis on the research sample, focusing on keywords from a total of 872 accounting－related public disclosure studies, and conducted four types of centrality and network analysis based on the frequency analysis. For this analysis, R and Python programs were used. [Findings] The results of this study are as follows. First, among a total of 872 domestic studies, the keywords with the highest frequency were accounting, profit, and company in that order. Second, as a result of the Degree centrality analysis, the key keywords were profit (0.0736), company (0.0664), and information (0.0564). Third, as a result of Closeness centrality analysis, the keywords showing connectivity that emphasized the distance between one node and all nodes in the entire network were profit (0.3468), company (0.3392), and information (0.3349). Fourth, as a result of Betweenness centrality analysis, the keywords shown to be most helpful in building a network of other nodes are profit (0.1499), company (0.1172), accounting (0.0990), and information (0.0842). Fifth, as a result of the Eigenvector centrality analysis, as an indicator that reflects the centrality of nodes in the weight, the keywords with the highest centrality were accounting (0.6136), international accounting standards (0.5371), and standards (0.3988). [Implications] Through this study, which is not an empirical study but a qualitative analysis using a text mining method, it is expected that later researchers will have an easier time analyzing research trends in previous studies, and furthermore, it is expected that further expansion of research topics will be possible.

Misappropriation in the Nigerian Oil and Gas Sector: Strategies for the Accountant General of the Federation

The study addressed the “Misappropriation in the Nigerian Oil and Gas Sector.” The paper employed a theoretical and content analysis approach, conducting an extensive review of literature from online journals and databases of standard-setting bodies such as the Auditing Standards Board and the Association of Certified Chartered Accountants (ACCA). Drawing from the Fraud Triangle Theory, the paper highlighted the three primary factors-opportunity, pressure, and rationalization-that motivate individuals to engage in fraudulent activities. The findings underscored the role of weak governance structures, political interference, and institutional deficiencies as key drivers of misappropriation and corruption within the Nigerian oil and gas sector. Moreover, the literature reviews revealed strategies to combat corruption, including strengthening regulatory frameworks, leveraging technology, and promoting a culture of integrity and ethical leadership. Effective measures to address misappropriation in the Nigerian oil and gas sector require comprehensive reforms, collaborative efforts between stakeholders, and rigorous enforcement and monitoring of policies. As the Accountant General of the Federation, it is recommended to prioritize accountability, transparency, and good governance through regular independent audits, establishment of a specialized anti-corruption unit, adoption of international accounting standards, implementation of whistleblower protection mechanisms, and ongoing capacity building and training programs for finance professionals and public officials involved in managing finances within the sector.

Modern problems of determining net realizable value in RAS and IFRS and ways to solve them

Thanks to the Federal Accounting Standard (FAS) 5/2019, net realizable value was introduced into Russian accounting for inventories. A similar value is also used in IAS 2. Despite the relatively long period of use of the specified value, its estimation still raises a number of questions when accounting and reporting according to both Russian and International Standards (hereinafter referred to as RAS and IFRS). These problems and ways to solve them are analyzed in this article. When carrying out research, methods such as analysis and synthesis, grouping method, comparison, analogy method, logical approach, systematic approach were used. As a result of the research carried out in this work, the main modern problems associated with determining the net realizable value in Russian and international accounting have been identified and proposals for their solution have been substantiated. The results obtained in this article will be useful to a wide range of readers interested in current issues relating to the regulations of RAS and IFRS, including the calculation of the net realizable value of inventories, can be used in the educational process of higher educational institutions, in the practical work of accounting departments of modern organizations, as well as in development and improvement of relevant domestic and international accounting standards.

The Impact of International Accounting and Auditing Standards on the Quality of Financial Reporting

Objective: This study aims to measure the impact of applying international standards for financial reporting and auditing on the quality of financial reports for a sample of Iraqi joint-stock companies. Methodology: The study goal is achieved by developing a special form to examine financial reports in addition to a special form to examine the reports of auditors and the extent of compliance with the adopted international standards. To achieve the research objectives, a content analysis method was used for the financial reports of a sample consisting of 18 companies listed on the Iraq Stock Exchange distributed across 8 different sectors of activity. Results: Our findings reveal that most of these companies do not adopt international accounting standards and financial reporting, except for the banking sector. Additionally, statutory auditors do not follow international auditing standards, except for those auditing companies that apply international financial reporting standards. Conclusion: The non-compliance to International Accounting and Auditing Standardsfor the most of listed companies could affect negatively the quality and reliability of financial information provided by them.

Classification and presentation of equity in IFRS financial statements

Subject. This article examines the methodological basis for the classification and presentation of an organization's equity in financial statements prepared in accordance with IFRS. Objectives. The article aims to substantiate the approach to the classification and presentation of information on the equity of an organization, ensuring its relevance and faithfulness. Methods. For the study, we used a logical analysis. Results. Based on the analysis, the article confirms the prospects for the combined use of the two features of the classification of capital items proposed in the Exposure Draft IASB/ED/2023/5 by the International Accounting Standards Board (IASB). Conclusions. As innovative financial instruments emerge, new problems will arise with the classification of financial instruments that have characteristics of both capital and liabilities. In this regard, it is necessary to continue research in the direction of the evolution of approaches to the classification of capital.

Summary on the Development of Accounting and Auditing Practises towards IFRS-IAS/ISA in Jordan: Historical and Theoretical Perspective

In this article, we take a look at the evolution of accounting in the Middle East [ME] region, with a focus on Jordan. We shall examine the major events in this region’s history and see how they relate to the global accounting agenda, changes in the local and international economic landscape, and other relevant developments. Pay close attention to how cultural and historical factors, in addition to worldwide accounting principles, impact the local accounting environment. The adoption of “International Financial Reporting Standards” [IFRS] by MENA nations is examined, along with the reasons and motives behind it, and the effects on the auditing and accounting professions as a whole. This marks a significant milestone in recent history. This article looks at the history of accounting and auditing in Jordan and how it has developed in relation to the International Accounting and Auditing Standards. It also discusses potential future advances in this field.