Value Of Liabilities Research Articles

Методологічний компонент удосконалення оцінки довгострокової заборгованості як фінансового інструменту

Accounts receivable and payable are one of the most common types of financial instruments of agricultural enterprises. Until recently, such debt was considered a traditional accounting object with established recognition rules, cost measurement and disclosure. However, since the end of 2019, the valuation of such financial instruments has changed due to introducing the present value as a priority for its long-term type. The article aims to reveal the methodology for determining the present value of long-term debt as the most common type of financial instrument. The specifics of the application of the present value for the assessment of long-term debt were disclosed. It was substantiated which types of such debt are subject to the discounting requirement and which are not. The problem points of introducing a new type of assessment, which affect the data of financial statements, were identified. The article contains the necessary data and rules for the most reliable calculation of the present value of long-term receivables and long-term liabilities as financial instruments. The study results show that for the most accurate and objective determination of the present value of long-term receivables and long-term liabilities as financial instruments, the agricultural enterprise needs to record the methodology of cost measurement of such objects in the Regulation of accounting policy. In particular, it is necessary to specify the object (which type of long-term debt is subject to discounting and which is not), the calculation (formula), the variable (discounting rate selection procedure) and the documentary (a form of the primary document) components.

ОРГАНІЗАЦІЯ ПЛАТІЖНИХ ПОСЛУГ І ГРОШОВИХ РОЗРАХУНКІВ ХОЛДИНГОВИМИ КОМПАНІЯМИ ТА ШЛЯХИ ЇЇ УДОСКОНАЛЕННЯ

The content of the novelties in the legislation related to payment services, the order of their provision, the subjects of payment service providers (including banking institutions), the conditions for conducting their activities and their supervision, the general principles of the functioning of payment systems, the issuance and use of electronic and of digital money of the National Bank of Ukraine, establishes the rights, obligations and responsibilities of participants in the payment market of Ukraine. The organization of payment services and cash settlements by holding companies is considered on the example of the diversified company Metinvest Holding. An analysis of the dynamics and structure of current assets in terms of receivables, current financial investments, funds and their equivalents of Metinvest Holding LLC was carried out. It was established that during 2020–2022 the value of current liabilities decreased, primarily due to a decrease in: accounts payable for goods, works, services and advances received. It has been proven that the ability of business entities to make payments and settlements is characterized by such indicators as the ratio of payables and receivables, liquidity indicators, etc. During the analyzed period, working capital was negative, and its deficit increased. Liquidity ratios are at an unsatisfactory level, and their reduction is also observed. The values of liquidity ratios differ slightly, since the main part of current assets is represented by receivables. The ratio of absolute liquidity indicates a critical inability to fulfill one's obligations. It has been established that the net flow of funds from operating activities during 2021–2022 is positive. The main source of incoming flows is revenue from the sale of finished products, goods, works, services, the main source of outgoing flows is spending on payment for goods, works, services. Recommendations for improving the organization of payment services and cash settlements by banks and holding companies have been developed: introduction of modern electronic technologies, streamlining of claims and search work, strengthening of liquid position, etc.

EFFICIENCY OF THE ACTIVITIES OF BANKING INSTITUTIONS IN UKRAINE

Introduction. The article examines statistical data on the number of banks that have a banking license, banks with foreign capital and the dynamics of the influence of foreign capital on the Ukrainian banking system in 2010–2021. The analysis of the dynamics of bank assets and liabilities and the share of bank assets in the gross domestic product is carried out of Ukraine in 2010–2021. The structure of ownership of the assets of the banking system, the dynamics of income, expenses, financial results, return on assets (ROA) and return on capital (ROE) of banks of Ukraine were studied. The conclusions regarding the current state and efficiency of operations were substantiated banks in 2010–2021. The purpose of the article is to analyze the efficiency of banking institutions in Ukraine in 2010–2021, to assess the capital concentration of the Ukrainian banking system and to substantiate the directions for increasing the efficiency of the functioning of the Ukrainian banking sector in modern conditions. Methods. Statistical methods, methods of techno-economic and financial analysis and observation are used to study development trends, the current state of functioning of the banking system of Ukraine. Statistical and graphic methods are used for processing and generalization of statistical data and their display in tables and figures. On the basis of the dialectical method of cognition, the ownership structure of the banking system, the dynamics of income, expenses, financial results, return on assets (ROA) and return on capital (ROE) of Ukrainian banks are summarized. The system method was used when studying the level of concentration of the banking system. Results. The study of trends in the development of the main indicators of banks' activity in Ukraine shows that during the analyzed period the number of commercial banks systematically decreased. At the same time, during the same period, the value of assets and liabilities of the banking sector increased. Banks occupy the leading place in the financial services market of Ukraine. However, for the modern banking system, there is a noticeable tendency towards a gradual decrease in the share of bank assets in GDP. In the analyzed period, the ownership structure of the banking system underwent significant regrouping in the groups of banks with a state share, banks of foreign banking groups, and banks with private capital. As a result of the transfer in 2016 of the system JSC CB “Pryvatbank” to 100% ownership of the state, the share of state banks in the structure of assets of the banking system has increased significantly. The banking market of Ukraine is concentrated, as evidenced by the values of the share of the largest bank in net assets (CR1), the five largest banks in net assets (CR5), the ten largest banks in net assets (CR10), the largest twenty banks in net assets ( CR20) and the Herfindahl-Hirschman index (HHI). The volume of non-performing loans (NPL) in Ukrainian banks was considered. Conclusions. Today, the banking sector has successfully adapted to work in the conditions of a pandemic and martial law and is properly performing its functions, supporting the economy. According to the results of recent years, the banking sector has been making profits. The profitability of assets and capital of the banking sector is growing. Increasing the efficiency of Ukrainian banks through cost reduction, the search for new sources of income, mainly commissions, through expanding the areas of interaction between banks and clients, in particular remote banking services, the use of modern innovations, financial technologies requires further scientific research.

Foreign Direct Investments in Poland against Countries of Visegrad Group

In the period of scarcity of investment capital, foreign direct investment (FDI) is an important source of its acquisition. These investments flow to the host countries in various conditions and consequences for the economy. The concept of linking the country’s position in terms of inflow and outflow of foreign direct investments with its economic development is the concept of the investment and development path – IDP (The Investment Development Path). The article diagnoses changes in the value of foreign direct investment in Poland against economies of Visegrad Group in 1995-2020, taking into account the effects of the pandemic on changes in FDI flows in 2016-2021. Against this background, the development of the Polish economy was diagnosed in the light of the path theory (IDP). The analysis covers the years 1995-2020 and 2016-2021 and uses data from UNCTAD and the World Bank. In the periods selected for the analysis, one can notice definitely different dynamics of changes in the value of FDI liabilities. The reaction of foreign investors in selected location markets varied during the pandemic. The diversification of the cumulative value of FDI receivables for individual countries is significant. During the pandemic, investors reacted to the situation in different ways. Among the selected countries, an increase in the value of FDI undertaken abroad was recorded in Slovakia and the Czech Republic. Polish investors and investors from Hungary made investments with lower values than in 2020. In all years, NOIP for Poland takes negative values, so the level of FDI undertaken in Poland exceeds the level of investments undertaken abroad. Identifying the transition to one of the most important stages on the IDP path – stage III is difficult. It is debatable to determine the period in which Poland entered such a stage. This results, among others, from low FDI. It is indicated that this is a period from 2004 to even 2013.

Managing reputational risk in the decumulation phase of a pension fund

In this paper, we suggest strategies for a pension provider to avoid a loss of reputation due to possible pension reductions in the decumulation phase. In different settings, we determine optimal actions to keep the pension plan solvent, i.e. value of the assets always above the net present value of the pension liabilities. With this in mind, we solve suitable singular control problems. We show that, in expectation, the pension provider can cover the costs of the optimal action via sharing bonus payments with the policyholders.

Assessing banks’ resilience: A complementary approach to stress testing using fair values from banks’ financial statements

AbstractFor more than a decade, supervisory banking authorities in Europe and the United States have sought to assess the resilience of banks to adverse economic episodes to safeguard the financial system's stability. They rely on regulatory capital measures like Common Equity Tier 1 (CET1) relative to risk‐weighted assets in the aftermath of potential economic crises. We propose a new measure of banks' resilience based on financial statements. The fair value margin (FVM) is estimated as the difference between the fair value of assets and the book value of liabilities, scaled by the book value of equity. We find that FVM is positively associated with the surplus or shortfall of CET1 resulting from the stress testing results from 2014, 2016 and 2018. To corroborate the relevance of FVM for supervisory authorities, we compare the ability of the loan component of FVM to predict future credit losses with the capital surplus/shortfall metric derived from the stress test. The findings indicate that the fair value of loans predicts net charge‐offs better than stress test outcomes. Therefore, we suggest that FVM could be used as a readily available and relatively low‐cost tool to assess bank resilience, thus complementing the stress test exercises.

Marking-to-market IAS 37 provisions using options: an empirical demonstration

Purpose International Accounting Standards Rule 37 (IAS 37) for Contingent Liabilities and Assets were designed to make analysis of exposures facing a corporate entity easier to understand, but the rules may be insufficiently prescriptive making provisions inadequate predictors of potential outlays. The purpose of this research is to redress this problem. We apply financial option theory to objectively mark-to-market the appropriateness of provisions replacing subjective inputs with market derived calculations. Design/methodology/approach This study applies financial option theory to determine whether provisions are appropriate according to market data. This research supports inferences regarding the probability of a provision being used while evidencing scope for earnings management. Findings In addition to showing how IAS 37 provisions may be calibrated against market data, from the large sample of UK-listed companies, the proposition that over-provisioning is common and related to share price volatility, is supported, supporting the view that IAS 37 rules may facilitate earnings management. Practical implications The financial and reporting community have struggled in interpreting the appropriateness of IAS 37 provisions. Are they too large or too small? What is the probability they will be used? Using option theory and market data, various subjective judgements may now be validated. This research should have tangible value to analysts, auditors, investors and other stakeholders concerned in the accurate valuation of potential liabilities. Originality/value Replacing subjective judgement and insufficiently prescriptive guidance, this study shows that financial option theory and share price data may be used to objectively calibrate the size of IAS 37 provisions.

ANALISIS OPTIMISASI DENGAN MENGGUNAKAN METODE GOAL PROGRAMMING TANPA PRIORITAS TERHADAP LAPORAN KEUANGAN BANK (STUDI KASUS: PT BANK NATIONAL NOBU TBK)

Periodically, Nobu Bank releases an annual financial report that describes the company's financial condition. The financial statements contain elements of financial statements, namely assets, liabilities, equity, income, and financial expenses. To analyze the optimization, the five elements of the financial statements are then expressed in a mathematical model as a constraint function to be processed using the Goal Programming Method. The Goal Programming method was chosen because it is considered a mathematical model that can be used to obtain solutions to problems that have many goals. After all, the deviation variable in the Goal Programming model can produce complete information on the relative achievement of existing goals so that optimal results can be achieved. The first step of the Goal Programming Method is to determine the decision variables, then determine the objective function, then determine the constraint function. The analysis and solution were carried out using the Simplex Method and validated with the LINGO. The results of the sensitivity analysis show that the five objectives have been achieved, namely, there are no deviations. This shows that the performance of the financial statements at Bank Nobu is optimal. However, two objectives can still be optimized, such as the value of liabilities can still be reduced by Rp.593,731.14 per year, and the value of financial expenses can still be reduced by Rp.30,599.66 per year.

The Effect of Altman Z-Score as Tool for Predicting Potential Bankruptcy on Stock Prices in Retail Subsector Companies Listed on the IDX in 2019 – 2021

The purpose of this study is to determine the Effect of Altman Z-Score as Tool for Predicting Potential Bankruptcy on Stock Prices in Retail Companies Listed on the IDX in 2019 – 2021. The data collection technique in this study uses documentation methods as well as literature studies published by the company. The data in this study uses financial statements published by retail sector companies listed on the Indonesia Stock Exchange in 2019 – 2021 by sampling using purposive sampling techniques. Companies that have met the sampling criteria are 11 companies. The data analysis method in this study uses Altman Z-score bankruptcy analysis, as well as for financial ratios using the ratio of Altman Z- score consisting of Working capital on total assets, retained earnings on total assets, profit before tax and interest on total assets, and book value of total equity at the book value of total liabilities. The next data analysis technique in this study used classical assumption tests, simple liner regression, and other hypothesis test tools. The results of this study showed that the Altman Z-score had a significant effect on the Stock Price of 17.7% with a calculated t value of 2.578 > 2.03951 (0.05 significant α) from the table. Based on the results of the Calculated Altman Z-score classification, it is shown that in 2021 there are 36 companies in a state of bankruptcy, 28% are in a state of gray area, and 36% are in a safe state.

A simple approach to estimate long-term interest rates

Abstract We propose an easy to implement yield curve extrapolation method to determine long-term interest rates suitable for regulatory valuation. We empirically evaluate this approach for the German nominal bond market, by estimating the model on bonds with maturities up to 20 years and assessing the out-of-sample performance for bonds with maturities beyond 20 years. Even though observed long-term yields are somewhat lower than the predicted yields, the method performs quite well empirically given its simplicity. We perform a case study on pension fund liability valuation and show that our proposed method would have a substantial impact on liability values.

What can we learn about credit risk from debt valuation adjustments?

Motivated by the debate about the introduction of the fair value option for (financial) liabilities (FVOL) and the requirement to recognize and separately disclose in financial statements debt valuation adjustments (DVAs), this study explores what we can learn about a firm’s credit risk from DVAs. Using a sample of US bank holding companies that elect the FVOL, we show that DVAs generally cannot be explained by the same factors that explain contemporaneous changes in bank’s credit quality. We further find that DVAs can explain future changes in credit risk when the fair value of liabilities is based on managerial inputs (Level 3). Overall our results suggest that managers have an information advantage in estimating credit risk and that DVAs provide inside information to the market.

CREATIVE ACCOUNTING AND SHAREHOLDERS WEALTH MAXIMIZATION IN LISTED CONSUMER GOODS COMPANIES IN NIGERIA

This study examines the effect of creative accounting practices on the shareholders wealth of 90 firm-year observations of ten (10) consumer goods companies listed on the Nigerian Stock Exchange (NSE). Ex post facto research design was adopted usingdataset for the period 2011–2019 which were collated from the annual reports and financial statements of the listed consumer goods companies. Four hypotheses were proposed and tested using pooled panel data regression. Findings revealed that frequentchanges in inventory valuation method and assets valuation methods respectively have significant effect on shareholders wealth, while frequent changes in depreciation methods and liabilities valuation methods do not significantly affect shareholders’ wealth. The study recommends that external auditors should pay attention to discretionary items in the financial statements in order to ensure that the assumptions used by managers are fair. Regulators should also evaluate the adequacy of policies around inventory and assets valuation while financial analysts and shareholders should note the application and consistency of accounting policies on inventory and assets.

Analysing the Potential of Bankruptcy using Altman Z-Score: A Case Study of PT. Garuda Indonesia

The improper company’s financial condition can affect the company’s performance to stay on track in the airline’s competition. The company should be gaining extra efforts, especially the management system, to achieve the company goal of obtaining the maximum profit. This study aimed to analyse the financial distress of Indonesian airline companies. This study was designed using a quantitative approach through secondary data collected from the financial report of the Indonesia Stock Exchange (IDX) from 2016 to 2020. The data were analysed using the Altman Z-Score. The variable of this study includes working capital to total assets, retained earnings to total assets, earnings before interest and taxes to total assets, market value of equity to book value of total liabilities and sales to total assets. The results of the study revealed that PT. Garuda Indonesia faced the financial difficulty that potentially led to bankruptcy risk. Evidence on the basis of Altman Z-Score value of PT. Garuda Indonesia in 2016-2020 is less than 1.81. In 2020, PT. Garuda Indonesia suffered high losses due to the impact of the COVID-19 pandemic.

Liabilities and stockholders' equity of the world's leading publicly traded oil and gas corporations

Subject. The article addresses liabilities and equity of twenty five leading publicly traded oil and gas companies from 2006 through 2018. Objectives. The focus is on determining the current values of the main components of liabilities and equity, identifying the key trends over the period under study, and factors that led to changes. Methods. The study rests on the methods of comparative and financial-economic analyses, summarizing financial reporting data. Results. I determined changes in the size and structure of liabilities and equity in the stock market sector of the industry and established the main drivers of the transformation. I revealed an increase in the balance sheet valuation of liabilities and equity of most of the investigated companies within the studied period, despite a noticeable decrease in their value after the industry crisis. The components of liabilities and equity remained approximately equal, but the transformation in the ratio between the components occurred within the indicators themselves. The long-term component started prevailing in the liabilities’ structure. It was driven by growing total debt, which almost equaled the value of accounts payable. As a result, the total debt became the dominant component of long-term liabilities, and accounts payable retained key positions only in the short-term component. In turn, an increase in the share of minority shareholders was noted in the structure of equity, however their role for the industry’s stock market sector is still insignificant. Conclusions. The main contribution to the growth of liabilities in the stock market sector of the oil and gas industry is made by the increase in the long-term component of the total debt of companies.

Valuation of Hybrid Pension Scheme Liabilities under Inflation

In recent years, it is of great interest to evaluate the level of liabilities of the hybrid pension system as the mixed pension schemes are favored by various countries around the world. This paper further improves the hybrid pension liability assessment method proposed by Broeders et al by accounting for inflation risk and assuming that inflation risk is measured by a price index that follows geometric Brownian motion. A simulation-based pricing framework is then introduced to assess the hybrid pension liability. The results show that the introduction of inflation risk increases the total outstanding liability of hybrid pensions. Furthermore, inflation is negatively correlated with the total outstanding liability of the hybrid pension scheme, while inflation volatility is positively correlated with it.

Evaluation and Effectiveness of the Adaptation of Evaluation Standards to the Training, Business Environment and Practices in the Republic of Bulgaria

Going through a series of crisis and post-crisis periods over the last twenty years has had a serious negative impact on the overall value of assets, liabilities and capital used for both private and public purposes. At the same time, the pressure on all levels of management decision-making in both the private and public sectors to deliver more and better services is growing. This requires a rethinking of the way in which the different types of values of the different types of assets, liabilities and capital are derived. The creation of different valuation standards in different countries is a prerequisite for a more correct and more efficient valuation of various assets, services, capital, etc. objective and subjective relations in an operating business unit. In this way there will be a prerequisite to make more effective management decisions in relation to the expenditure of resources. On the one hand, due to global trends for legislation change, climate change, energy efficiency, etc., the standards and evaluation methods themselves are evolving, which is of particular importance for our country. On the other hand, the specifics of our economy and legislation are a prerequisite for imposing the need to develop national valuation standards to provide a prerequisite for more accurate derivation of different types of values, which affects the correct and fair presentation of assets and liabilities on management decisions. The present study aims to measure and analyze the need for national assessment standards and their impact on educational programs. The results of the calculations of the evaluation and the effectiveness of the adaptation of the evaluation standards show that the differences in the philosophy and application of the individual standards in individual countries are significant, which is a prerequisite for the differences in the derived values. This requires the creation of specific disciplines for assessment training.

Experts versus representatives? Financialised valuation and institutional change in financial governance

ABSTRACT Valuation devices and institutional change are key aspects of financialisation, but have been largely separated in the literature. This article explores the causal link between both concepts. We draw on the linked ecologies framework to argue that financialised valuation, such as market valuation of assets and liabilities, creates opportunities for financial experts to influence policy processes. Making use of their institutional position, experts frame policy problems to advance further financialisation as a solution. So doing, they perform essential boundary work to tie authority over financial knowledge to their social position as financial market actors. The result is a process of endogenous institutional change, whereby financial experts increasingly displace other actors in governance arrangements. We illustrate this argument providing a case study of pension fund governance in the Netherlands. There, financialised valuation requirements led to a crisis of pension funding, to which policymakers responded by strengthening experts’ positions on pension fund boards, thereby eroding century-old corporatist institutions. We show how the infrastructural entanglements between financial markets and the state in the Dutch pension system not only benefited financial actors’ institutional positions, but also point to limits of financial agency as the state increased its own capacity over a formerly corporatist domain.

Association of household net worth with healthcare utilization in 90-day window after radical cystectomy using real-world data.

444 Background: Radical cystectomy (RC) remains the gold standard for muscle invasive bladder cancer yet confers significant healthcare costs. Prior work on the impact of costs commonly relied on comparisons by insurance status (yes/no) and income, a partial proxy for net worth, ie one’s net economic standing or value of financial assets minus liabilities. Few have examined the relationship between net worth and encounter type. Methods: We identified commercially insured Black, White, Asian, and Hispanic patients who underwent radical cystectomy between January 1, 2007 to April 10, 2021 in The OptumLabs Data Warehouse, a longitudinal, real-world data asset with de-identified administrative claims and electronic health record data. Demographics and costs included household net worth, health plan costs, out of pocket costs, and total healthcare costs accrued from index admission to 90 days after. Multivariable logistic regression models were generated for each encounter type [acute inpatient, emergency department (ED), outpatient, and office visit]. Odds ratios (OR) are presented with 95% confidence intervals (CI) and p-values. A p value of <0.05 was deemed statistically significant. Results: The study cohort was comprised of 141,903 patients (2.4% were Black, 11.4% Hispanic, and 8.1% Asian). Household net worth categories were near evenly distributed amongst the study cohort. Acute inpatient encounters harbored the greatest health plan (mean $24,642.80, SD $57,218.41) and out of pocket costs (mean $1,428.24, SD $2108). Office visits conferred the lowest health plan costs (mean $1,126.78, SD $4,119.12) while ED visits had the lowest out of pocket costs (mean $181.88; SD $399.65). Black patients harbored increased odds of an acute inpatient encounter (HR 1.22, 95% CI 1.16-1.29) and ED encounter (HR 1.20, 95% CI 1.14-1.27) while Asian (HR 0.76, 95% CI 0.69-0.85, p<0.001) and Hispanic (HR 0.74, 95% CI 0.69-0.78, p<0.001) patients had lower odds of an outpatient encounter. Increasing household net worth was associated with decreasing odds of acute inpatient or ED encounters, and greater odds of an office visit. Conclusions: Our study is the largest cohort of commercially insured patients to examine variations in healthcare utilization by net worth in the 90 days after radical cystectomy. Those with lower net worth harbored greater risk of an acute inpatient encounter (and higher medical costs) while those with the greater net worth had greater odds of office visits (and lower costs). Greater financial flexibility (i.e., net worth) continues to confer differences in healthcare utilization (and lower healthcare costs), even within a commercially insured population. Household net worth provides a more comprehensive assessment of patients’ financial flexibility than income alone and functions as proxy for healthcare access and privilege that could not be directly measured.

The Impact of a New Accounting Standard on Assets, Liabilities and Leverage of Companies: Evidence from Energy Industry

The climate policy of the EU enforced substantial changes for producers and suppliers of energy. New assets and providers of capital are needed to fulfill the policy requirements. To provide comparability and facilitate an investment process, EU law requires companies to prepare annual financial statements according to International Financial Reporting Standards. One of these accounting standards—IFRS 16 Leases—specifies how to recognize, measure, present and disclose leases. It came into force in 2019 and implemented a single lessee accounting model, contrary to a dual accounting approach for lease accounting. The latter approach enabled companies to keep leased tangible assets and respective liabilities off-balance sheet. By using a sample of companies from the energy industry (oil, gas, energy and mining sectors) that are listed on the Warsaw Stock Exchange, we examine, measure, and analyze the impact of IFRS 16 Leases implementation on the value of assets, liabilities and leverage on assets and leverage on equity. The paper may serve as an insightful case study of how the implementation of a new standard influences the financial situation of the affected companies in the energy industry. Our paper contributes to the scientific debate in the following three ways: (1) we confirmed the influence of IFRS 16 Leases on assets, liabilities, leverage on assets and leverage on equity that was anticipated in the literature, (2) using the auditing methodology, we demonstrated the material changes of assets and liabilities in the energy industry, (3) based on the research results, we suggested recommendations for further scientific studies.

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.