Recognition Of Liabilities Research Articles

Analisis perlakuan akuntansi sewa berdasarkan PSAK No. 73 pada PT. PLN (Persero) Unit Induk Distribusi Suluttenggo

State-Owned Enterprises (BUMN) must follow changes in the applicable accounting standards policy. This includes the lease accounting policy in accordance with PSAK No. 73. These standards are designed to ensure consistency and transparency in financial reporting. The transition from PSAK No. 30 to PSAK No. 73 will have a significant impact on the accounting treatment of leases and the company's financial statements. This study will analyse the accounting treatment of leases and their impact on State Electricity Company (PT PLN Persero) Unit Induk Distribusi Suluttenggo. This study employs a qualitative research method with a descriptive analysis approach. The data was obtained through interviews with the relevant parties and a thorough examination of the company's financial statements. The results clearly show that the company's accounting treatment of leases is in line with PSAK No. 73. However, there are some areas where the presentation of leases could be improved. The transition has had a positive impact on the company's financial statements, with an increase in total assets and liabilities due to the recognition of lease assets and liabilities on the balance sheet and a decrease in total operating expenses.

The effect of ASC 842 leases on bond yields

This study examines how the formal recognition of lease liabilities required by ASC 842 affects corporate bonds pricing. We document significant bond yield increases with the unexpected off-balance sheet liability revealed by the company. The yield reaction displays an asymmetric pattern, with an increase in yields for previously underestimated operating lease liabilities, but no correction for overestimations. Credit ratings are more likely to be downgraded at firms with severely underestimated operating leases. Collectively, our results suggest that ASC 842 has implications for corporate bond pricing.

Analysis of the Impact of the Implementation of PSAK 73 on Leases on Financial Performance in Transportation & Logistics sub-sector companies listed on the Indonesia Stock Exchange in 2020-2022 with DER as a Moderating Variable

Growing business and economic activities cause the level of industrial competition to be more competitive. This study aims to analyze the impact of the implementation of PSAK 73 on leases on the financial performance of companies in the transportation & logistics sub-sector listed on the Indonesia Stock Exchange during the period of 2017 - 2022. PSAK 73 was introduced as an accounting standard that regulates the recognition, measurement, and disclosure of rental transactions, which can affect a company's financial statements. The research used is quantitative with a descriptive analysis method by looking at the impact of the implementation of PSAK 73 on the financial performance of companies in the transportation & logistics sub-sector. The data used is sourced from the company's published financial statements listed on the Indonesia Stock Exchange. The results of this study are expected to provide a better understanding of the impact of the implementation of PSAK 73 on the financial performance of companies in the transportation & logistics sub-sector, as well as provide input for practitioners and regulators in facing the implementation of new accounting standards. The results of this study concluded that liability recognition has an effect on financial performance, asset recognition has no effect on financial performance, equity recognition has no effect on financial performance, debt to equity ratio strengthens liability recognition to financial performance, debt to equity ratio strengthens asset recognition Debt to Equity Ratio weakens Equity Recognition to Financial Performance.

Carbon Accounting: Its Implications on Accounting Practices and Corporate Sustainability Reports

Carbon Accounting is a new accounting paradigm on ecological-based economic transactions. It is also known as carbon cost management. The issues regarding carbon cost management will have implications for other strategic issues related to management accounting. The concept and application of Carbon Accounting will also have broad implications for the professions and strategic issues of carbon management accounting. This study focuses on the implication of carbon accounting on accounting practices and corporate sustainability reports. The literature reviews and qualitative analyses were conducted to grab the philosophy, practice and implication of implementation of carbon accounting – carbon cost management. Based on the study, carbon accounting implementation implied to accounting practices and corporate sustainability report. In term of calculating carbon emission or greenhouse gasses, there were four methods as set by Inter-governmental Panel for Climate Change (IPCC) and European Renewable Energy. In term of Corporate Sustainability Report, there were three theories considered: Instrumental Theories, Social & Political Theories and Normative Theories. It is difficult to account for emission allowances, and revealed that there is a potential guidance role for auditors during the absence of an international accounting standard. With the emission allowance assets, there is diversity in the accounting treatment of liabilities, and a considerable level of non-disclosure. In practice, this means that the only liability recognition in the financial statements is for shortfalls in allowances.

Accounting for deferred taxes in the initial recognition of assets and liabilities. Part 2

Subject. This article discusses the methodological particularities of recording deferred taxes arising from the initial recognition of assets and liabilities. Objectives. The article aims to analyze the approaches of the developers of American and International Standards in terms of accounting for deferred taxes in the initial recognition of assets and liabilities, as well as characterize the problems of the Initial Recognition Exemption – IRE rule, and propose areas for their elimination. Methods. The research is speculative. For the study, I used the dialectical method of scientific knowledge, the method of collecting theoretical and regulatory information, the method of formalization, as well as analysis, synthesis, observation, and comparison. Results. The article summarizes the foreign experience of accounting for deferred taxes at the initial recognition of an asset. It describes the key situations for applying the simultaneous equation method in accordance with American practices, and justifies the economic benefits of using this approach. Conclusions and Relevance. The IRE rule does not provide an opportunity to reliably disclose information about the impact of taxation on the financial position of the company at the initial recognition of assets and liabilities. The method of simultaneous equations eliminates this problem, but there are contradictions associated with the understanding of fair value, which is adjusted for deferred taxes. It is necessary to use the American experience in improving standards and conduct additional theoretical research to develop methodological approaches to accounting for deferred taxes at the initial recognition of assets and liabilities. The results of the study can be useful to practitioners in the field of deferred tax accounting, as well as analysts and researchers whose activities are focused on accounting, taxation, and other persons concerned who study the theoretical and financial aspects of deferred taxes.

Principles-based standards and accountants’ financial reporting judgments: does work experience matter?

Purpose The purpose of this study is to examine accountants’ application of principles-based accounting standards to a lawsuit contingency recognition scenario and the potential role that accounting work experience plays in mitigating accountants’ aggressive financial reporting. Design/methodology/approach This study presents a 2 × 2 between-subjects experiment with accounting experience (measured as high vs low) and contingency type (asset vs liability) as independent variables and accountants’ lawsuit contingency conservatism likelihood judgments and US$ recognition recommendations as the dependent variables. Findings Consistent with expectations, findings indicate that more experienced accountants are more likely to recognize liabilities and items that decrease income and less likely to recognize assets and items that increase income than their less experienced counterparts. Accountants also recommended recognizing lower (higher) mean US$ amounts for assets (liabilities), as expected. Supplemental analyses show a significant moderated-mediated effect whereby the interactive effect of contingency type and accounting experience on individuals’ US$ recognition recommendations is partially mediated through the nature of the conservatism judgment. Practical implications The finding that less experienced accountants report more aggressively than more experienced accountants when applying a principles-based standard supports the call for using judgment frameworks in imprecise standard settings and suggests that firms may want to ensure that accountants with adequate work experience are on hand as U.S. generally accepted accounting principles become more principles-based over time. Originality/value To the best of the authors’ knowledge, this study is the first to examine the impact of accounting work experience on the application of principles-based accounting standards and the mitigation of aggressive financial reporting. Our supplemental analyses also identify the nature of the conservatism judgment as a mediating mechanism which partially explains more experienced accountants’ US$ asset and liability recognition recommendations.

Level of Disclosure of Environmental Provisions and Contingent Liabilities

Disclosure allows accounting to achieve its main objective, that of providing useful and reliable information to its users. Thus, based on the Theory of Disclosure, this study aims to identify the level of disclosure of provisions and environmental contingent liabilities of companies with high potential for pollution. For this, descriptive research with a qualitative approach was carried out, applying the content analysis technique in the financial statements between the years 2010 and 2019. For data collection, a checklist prepared according to the established criteria was used. by the Accounting Pronouncements Committee No. 25 (CPC 25) for the recognition and disclosure of provisions and contingent liabilities of an environmental nature. The findings reveal a low disclosure of the established items, despite the growing number of affirmative observations in the last three years. As for the level of disclosure, the results showed that the most prominent segment was the extraction and treatment of minerals, with a percentage of 73% in the group of companies listed on the ISE. Regarding the analysis of the groups, the average of the companies listed and not listed on the Corporate Sustainability Index (ISE) was calculated, showing through the Student's T test the existence of a statistically significant difference between the averages, of 27.66 and 15 ,21, respectively, accepting and rejecting the research null hypothesis. However, the need for other analysis methods was identified to confirm whether the companies included in the ISE have a higher level of disclosure.

Accounting for deferred taxes in the initial recognition of assets and liabilities. Part 1

Subject. This article discusses the methodological particularities of recording deferred taxes arising from the initial recognition of assets and liabilities. Objectives. The article aims to analyze the approaches of the developers of American and International Standards in terms of accounting for deferred taxes in the initial recognition of assets and liabilities, as well as characterize the problems of the Initial Recognition Exemption – IRE rule, and propose areas for their elimination. Methods. The research is speculative. For the study, I used the dialectical method of scientific knowledge, the method of collecting theoretical and regulatory information, the method of formalization, as well as analysis, synthesis, observation, and comparison. Results. The article summarizes the foreign experience of accounting for deferred taxes at the initial recognition of an asset. It describes the key situations for applying the simultaneous equation method in accordance with American practices, and justifies the economic benefits of using this approach. Conclusions and Relevance. The IRE rule does not provide an opportunity to reliably disclose information about the impact of taxation on the financial position of the company at the initial recognition of assets and liabilities. The method of simultaneous equations eliminates this problem, but there are contradictions associated with the understanding of fair value, which is adjusted for deferred taxes. It is necessary to use the American experience in improving standards and conduct additional theoretical research to develop methodological approaches to accounting for deferred taxes at the initial recognition of assets and liabilities. The results of the study can be useful to practitioners in the field of deferred tax accounting, as well as analysts and researchers whose activities are focused on accounting, taxation, and other persons concerned who study the theoretical and financial aspects of deferred taxes.

The impact of IFRS adoption on Saudi Arabia

PurposeThis study aims to examine the implementation of International Financial Reporting Standards (IFRS) in Saudi Arabia. It investigates how the adoption of IFRS has affected four critical areas in the financial statements of publicly listed companies: profit and loss statement, balance sheet, cash flow statement and retained equity statement in Saudi Arabia. The paper also explores the essential factors/drivers that influence the adoption of IFRS and its implication in Saudi Arabia.Design/methodology/approachData was obtained from Saudi Stock Exchange (Tadawul) listed companies from eleven industries in Saudi Arabia. This cross-sectional study analyses critical financial data across eleven distinctive industries. To identify the impact of adopting IFRS, the researchers use a paired t-test to evaluate seven key elements of financial statements underlying the critical areas: non-current asset, current asset, total assets, shareholders equity, non-current liability, current liability and total liability. The sample captures cross-sectional data from well-developed global industries in Saudi Arabia, pre- and post-implementation of IFRS. Thus, the analysis of the sample data gives a representative picture of the population of the Saudi Arabian industry.FindingsThe results reveal significant differences between GAAP and IFRS reporting standards in the measurement, recognition and classification of non-current assets and liabilities. The differences are expressed in the variance between the GAAP and IFRS. Specifically, the differences between GAAP and IFRS demonstrated by the t-value are significant and reliable (respectively, 5.3 and 4.1). Additionally, the t-value is validated by the p-value, which in both was significant.Research limitations/implicationsThe outcomes of this research will benefit accounting information users, practitioners, researchers and regulators. Since Saudi Arabia’s policymakers have mandated the full adoption of IFRS in financial reporting, the study contributes to the adoption of IFRS practices throughout the Saudi industry. Adopting full IFRS standards requires widespread IFRS expertise to cope with the transition.Originality/valueThis study advances research into the perennial issues associated with changes in reporting towards IFRS standards, especially in Saudi Arabia. The contribution to theory and practice enters new and fruitful areas.

Does recognition versus disclosure of pension liabilities affect credit ratings? Evidence from Japan

Whether credit market participants process disclosure and recognition of pension information differently has not been fully explored. To fill this gap, this study investigates whether the change in a pension accounting standard related to the recognition rule influences firms’ credit risk in Japan. Statement No. 26, Accounting Standard for Retirement Benefits, stipulates that firms recognize previously disclosed pension information on the balance sheet. Employing the implementation of Statement No. 26, I explore how differences between disclosed and recognized pension liabilities affect credit ratings. I find that off–balance sheet pension liabilities are associated with credit ratings prior to Statement No. 26. I also find similar relations between disclosure versus recognition of pension liabilities and credit ratings. When firms have a small pension plan deficit, off–balance sheet pension liabilities provide risk-relevant information, and the risk relevance of disclosed and recognized pension liabilities is statistically similar. My overall results suggest that mandating pension recognition does not affect the credit risk assessment by credit rating agencies.

MARITAL PROPERTY’ DIVISION: ISSUES OF THEORY, LEGISLATION AND LAW ENFORCEMENT

Abstract: the article is devoted to such aspects of marital property’ division as the division of business assets and liabilities. Attention is drawn to the fact that since the introduction of the Family Code of the Russian Federation, the structure of the economic basis of an average Russian family has changed significantly. It is concluded that when dividing, a large block of shares should be recognized as an indivisible thing and transferred to the spouse who was doing the business of the company. It is emphasized that doing business as an individual entrepreneur by one of the spouses is rather risky. The impossibility of sectioning an account on a social network is indicated, as well as the difficulties with the division of cryptocurrency. Attention is drawn to the absence in the legislation of the presumption of the community of spouses’ debts. It’s criticized that the financial manager, in accordance with the rules of the special law “On Insolvency (Bankruptcy)”, includes in the bankruptcy estate all the common property of both spouses (former spouses), sells this property, and only after satisfying the requirements of creditors within the share of the debtor spouse, if any funds remain, these funds are issued to the debtor's spouse. The recognition of tax liabilities as common obligations of spouses is debated.

Забезпечення та умовні зобов’язання в міжнародній і національній системах обліку

Abstract. Introduction. International accounting standards, which are implemented by business entities, allow to increase the transparency and efficiency of the management system, provide the opportunity to attract investments and access to international markets. Thanks to the application of international standards, a reliable information base is formed, which allows you to assess the real financial situation, discloses income, expenses, equity, assets and liabilities. Purpose. The article examines the economic essence of obligations from a legal and economic point of view and features of disclosure of information about conditional obligations and security. The methodological provisions of the procedure for determining the criteria for recognition of liabilities, contingent liabilities and guarantees, and their reflection in financial statements, are substantiated. Key issues of harmonization of national and international standards of accounting and financial reporting regarding contingent liabilities and guarantees are considered. Results. The research substantiates that from an economic point of view, the essence of obligations is considered as payables, the repayment of which will lead to the disposal of resources. This approach significantly narrows the interpretation of this category, since not all obligations that arise in civil and economic law are reflected in accounting. When recognizing liabilities, the factor of the occurrence of an event with uncertain consequences is taken into account, which accordingly affects the display of information about the occurrence of such events as part of contingent liabilities or guarantees. Conclusions. National accounting standards lag far behind similar international standards regarding the informativeness of financial data disclosure. Harmonization of the provisions of national and international standards, with the aim of updating the provisions (standards) of accounting, should become tools for solving problems. Another way to solve the problem can be recognition as national international accounting and financial reporting standards.

Does mandatory disclosure affect recognition of contingent liabilities? Evidence from FIN 48

AbstractThis paper investigates whether mandatory disclosure affects managers’ decisions to recognize contingent tax liabilities. Because of the proprietary nature of tax disclosures, some managers have an incentive to minimize tax reserves and to limit the quality of disclosures, while others prefer to maintain large tax reserves to meet future earnings goals. If large tax reserves are maintained, additional disclosure may be beneficial to reduce information asymmetry between managers and financial statement users. I find that firms which increase tax reserves when they implement FIN 48 are more likely to issue higher quality FIN 48 disclosures. Poor disclosure quality is associated with higher future tax expense suggesting that managers who believe the tax disclosures may be used by tax examiners also want to limit the amount of unrecognized tax benefit reported.

Value Added Tax the Internet Trading: Features of Documentation, Accounting and Reporting

The scientific article reveals the peculiarities of documenting the value added tax calculations (hereinafter - VAT) in online commerce. The rules for filling in tax invoices and calculating adjustments to them in accordance with changes in the current tax legislation have been clarified.
 The issues related to the recognition of VAT liabilities for e-commerce transactions are specified. It is determined that the sale of goods on full prepayment with the use of payment services takes place in three stages: the operation of acceptance by payment service funds from the buyer, which forms a corresponding electronic message of acceptance of funds; non-cash transfer operation by the payment service of funds received from the buyer to the seller's bank account; transfer of goods to the buyer. The basis for accrual of VAT liabilities is the contractual value of goods, while the bank's fee which is withheld by the acquirer automatically when crediting money to the account does not reduce the tax base.
 Certain recommendations are offered to improve the method of accounting for the sale of goods on the terms of card prepayment and subsequent payment through the postal carrier for businesses whose main activity is Internet commerce. Analytical sections are considered to reflect in the accounting of VAT liabilities for transactions on the sale of goods through the online store on the card prepayment basis.
 The method of compiling a VAT tax return in terms of identifying transactions for sale of goods in the context of online commerce needs to be improved. Based on this, the structure and rules of filling in the current VAT tax return were considered and recommendations for improving reporting indicators were proposed.

State aid and IFRS accounting policy

Introduction. This paper establishes that accounting policy is an important step in the organization of accounting. The paper shows that an effective accounting policy allows forming reliable and high-quality indicators in the financial statements. This study examines the main ideas by scholars on problems of IFRS accounting policy. Also, the paper gives a critical assessment their main positions. The purpose of the paper is to analyze the system of accounting standards for formation state aid accounting policy. Results. The study shows that the state aid transactions accounting policy is a complex system of interrelated standards. Firstly, the article examines the impact of international accounting standards on the formation of accounting policies in general. Secondly, research shows that other standards also have a partial impact. Also, disclosing of significant accounting policies allows bettering understanding the methodological basis of financial reporting. Moreover, business entities adhere to the principle of conciseness in the formation of accounting policies. Finally, the article highlights the main elements of the State aid transactions accounting policy in accordance with IAS 20: recognition of state aid; methods of accounting for state grants; types and forms of state aid; recognition of contingent assets and contingent liabilities at the recognition of state aid; methods of presenting information on government grants related to assets and government grants related to income; disclosure of information in the notes to the financial statements. Conclusion. Accounting policy is based on standards and judgments of management, which are proved by significant facts. Therefore, IFRS accounting policies should be viewed as a philosophy of choosing alternatives and accounting methods for business.

ОБЛІКОВЕ ЗАБЕЗПЕЧЕННЯ УПРАВЛІННЯ ДОВГОСТРОКОВИМИ ЗОБОВ’ЯЗАННЯМИ ПІДПРИЄМСТВ

The article reveals the nature, recognition and evaluation of long-term liabilities, their composition, summarizes the method of accounting for long-term liabilities and disclosure of information in the financial statements, based on which the company makes management decisions. The purpose of the article is to substantiate the theoretical and methodological provisions and develop practical recommendations aimed at improving the accounting support for long-term liabilities. The article will reveal information about the nature and evaluation of long-term liabilities. Valuation of liabilities can be measured reliably, and the future benefits of reducing those liabilities may decrease. This paper presents the composition of long-term liabilities in accordance with NP (S) BU 11 "Liabilities" and the Chart of Accounts. Correspondence of accounts on accounting of long-term financial lease liabilities, bonds sold at a premium and at a discount, promissory notes in national currency will be considered. In modern conditions, enterprises are one of the main sources of financing of economic activity, so the use of obligations effectively (or productively) affects the activities of enterprises. The issue of accounting for accounts payable (long-term and current) is relevant for enterprises, because the financial condition of the enterprise largely depends on the effective management of this type of debt. The question of timeliness of settlements between business entities is acute. Failure to repay liabilities, including long-term ones, leads to the accumulation of such debt and the depreciation of funds for creditors, which adversely affects the financial condition of the enterprise. The solution to this problem is possible under the conditions of effective management of long-term liabilities based on the analysis of information generated in the accounting system for reflection in the financial statements. The information on methodological bases of formation in the account of obligations and their disclosure in the reporting which is regulated by the legislative base is presented. Long-term liabilities are reflected in the liabilities of the balance sheet at their present value in Section II, and the notes to the financial statements provide information on the list and amounts of liabilities. Based on this reporting, the company can make management decisions.

ACCOUNTING OF REGISTERED CAPITAL IN ENTERPRISES WITH FOREIGN INVESTMENTS

Introduction. The article analyzes the norms of current legislation in the field of foreign direct investment and taxation of transactions caused by the introduction of founding foreign investment. The essence of enterprises with foreign investments is revealed and the manifestations of foreign investment are determined. The procedure for making foreign investments in the authorized capital of business structures is outlined. Forms of foreign investment are described. The sources of equity formation of enterprises with foreign investments are given. Peculiarities of deposits to enterprises with foreign investments are determined. Emphasis is placed on the fact that the founders of enterprises with foreign investment have the opportunity to make contributions to the authorized capital with both cash and non-financial assets. The procedure for evaluating founding investments has been studied. The order of accounting reflection of formation of the authorized capital of the enterprises with foreign investments is outlined. The peculiarities of accounting and reporting of the founders' contributions to the authorized capital of enterprises with foreign investment are revealed. It is determined that the recognition of liabilities of non-resident founders for contributions to the authorized capital in foreign currency are both monetary and non-monetary balance sheet items. The method of accounting for positive and negative exchange rate differences is presented. Goal. Elucidation of the order of accounting reflection of the authorized capital at the enterprises with foreign investments and expression of offers on improvement of the account of the researched object. Method (methodology). General scientific methods (analysis, synthesis, induction and deduction), empirical theoretical (formalization, hypothetical) and empirical methodological methods of research (computational and analytical, implementation of results in practice, reporting of economic activity). Results. In order to accurately account for information on exchange differences, recognition of the founders' obligations on contributions to the authorized capital in foreign currency, it is proposed to reflect them in a separate analytical account, which should be opened in sub-account 423 "Accumulated exchange differences". Proposals have been made to improve the order of reflection in the accounting system of enterprises with foreign investment, exchange rate differences recognized as a result of revaluation of liabilities of non-resident founders on contributions to the registered capital.

The Association between Mandated Environmental Liability Recognition and Voluntary ESG Disclosure Quality

The Association between Mandated Environmental Liability Recognition and Voluntary ESG Disclosure Quality

Managing and Disclosing Environmental Risks: A Tale of Two Utilities

ABSTRACTThis case introduces students to the topic of contingent liabilities by examining the actual management decisions of two energy companies facing increased regulatory scrutiny over the environmental risks associated with coal ash. The case learning objectives include (1) researching and summarizing the guidance governing the recognition and disclosure of contingent liabilities; (2) critically assessing a company's decisions regarding the recognition and disclosure of environmental liabilities; (3) accounting for asset retirement obligations; and (4) articulating the ethical implications of a company's management and disclosure of environmental risks from the perspectives of various stakeholders. The case is designed for use in an intermediate accounting course at the undergraduate level. Students reported improvement in their knowledge and comprehension of contingent liabilities and their appreciation for the ethical implications of accounting decisions. Students also noted that they enjoyed discussing these issues in the context of real companies facing complex environmental challenges.

Issues and Challenges in Implementing International Public Sector Accounting Standards (IPSAS)

Purpose: This paper aims to identify the prerequisites as well as the issues and challenges in implementing the accrual basis International Public Sector Accounting Standards (IPSAS). Methodology/Approach: Using the archival approach, this paper presents a review of past studies and published information on the issues and challenges faced by various developing countries in adopting IPSAS. Findings: The challenges faced by countries in adopting IPSAS can be classified into three categories: (1) Resources which include a lack of competent accounting and finance staff, and a lack of IT facilities and IT support; (2) Accounting and reporting issues related to difficulties in the recognition and measurement of assets, liabilities, revenue and expenses; and (3) Top management commitment in ensuring successful change management programme. Research Limitations/Implications: This paper outlines the results of the preliminary phase, i.e., a review of previous studies, before a study to examine the issues and challenges in the adoption of accrual accounting and the Malaysian Public Sector Accounting Standards (MPSAS) in state governments in Malaysia is undertaken. Thus, the discussion in this paper is limited to the issues and challenges in adopting IPSAS. Practical Implications: This study shall provide guidelines for Malaysian state governments in promoting successful implementation of MPSAS. Originality/Value: This paper provides the basis for the next phase of the study on state governments which includes questionnaire surveys and interviews. Keywords: Accrual accounting, IPSAS, MPSAS, public sector, developing countries