The essence of equity capital and its structuring for accounting needs

2017 ◽  
pp. 117-126
Author(s):  
Iryna Nazarova
Keyword(s):  
Accounting Standards ◽  
Financial Statements ◽  
Capital Allocation ◽  
Equity Capital ◽  
National Standards ◽  
Equity Structure ◽  
Key Factor ◽  
Business Property ◽  
Informational Value

The paper considers various interpretations of the essence of equity capital. The concept of equity capital is viewed from the perspective of property as a venture capital, i. e. business property, which does not guarantee profits and dividends, and for which there is no clear schedule of returning funds to investors and shareholders. The most common equity capital components in national and foreign practice are examined and compared. It is pointed out that the equity components mainly used in Ukraine are defined by the National Accounting Standards. Alternatively, the structure of equity capital components in foreign practice relies on the Conceptual Framework of Financial Statements, but it is further detailed by national standards of each country and depends on its policy and accounting characteristics. The structure of equity capital in foreign practice may be influenced by shareholders’ decisions on the establishment of funds (additional capital), allocation of profits, transactions with treasury shares. It is made clear that in most countries equity capital components include joint stock capital, surplus reserves, and retained profit. The article reviews the classification of equity capital, viewed as the key factor, and determines its influence on accounting principles and policies. It is concluded that in regulatory documents, there are no clear lines between types of equity capital. The paper also discusses various views of scholars on equity capital arrangement. It is found that in research works, equity capital is classified based on various characteristics, but the majority of researchers consider sources of equity capital to be the main criterion. In addition, there is no consensus among academics as to what types of equity capital can be singled out by the criterion described. Taking into consideration some proposals of scholars and foreign practice related to ac- counting of equity capital, the author develops a generalized structure of equity capital which is based on the sources of capital formation and includes: invested capital, particularly registered capital (statutory and mandatory share capital), corrective capital (unpaid and withdrawn capital), additional capital (capital received from investors for stock that exceeds the par value of the stock, i.e. additional equity capital); acquired capital (assets received for free, capital formed from revaluation of assets, other capital) and reinvested capital (retained profits (uncovered losses) and surplus reserves). The above equity structure can be used to prepare financial statements in order to increase its informational value. Proposals are given on how to improve methods for accounting of equity capital, in particular accounting of additional capital invested by founders in the account entitled “Non-registered investments of owners”.

scholarly journals Equity capital: approaches to definition, classification and its structure

2019 ◽  
Vol 11 (2) ◽  
Author(s):  
T. Markova ◽  
O. Volodina ◽  
O. Mytrofanov ◽  
A. Chehlatonieva
Keyword(s):  
Financial Stability ◽  
Financial Statements ◽  
Financial Economic ◽  
Practical Aspect ◽  
Equity Capital ◽  
Equity Structure ◽  
Debt Capital ◽  
Correct Calculation ◽  
Legislative Changes

The article examines the essence of the concept of "equity capital" and conceptual approaches to itsdefinition and classification. It has been determined that the concept of "capital" has had roots since antiqu ity, and meant a source of accumulation of wealth. However, in today's conditions of the market system capital is generalizing and at the same time varied, because it covers intellectual, natural, social capital. The importance of the correct calculation of structural equilibrium, which is a guarantee of financial competitiveness,financial stability and solvency in modern fast financial, economic and legislative changes, has been substantiated. Three approaches to the classification of the structure of the enterprise according to the normativelegislative base (national and international) and practical aspect has been determined. The practical analytical analysis of the equity structure based on the financial statements of the enterprise indicates that the equity of the enterprise in the current conditions of management decreases, in particular, by increasing the uncovered loss. The advantage of debt capital in the form of payables proves the need to make optimal decisionson timely control and adjustment of the capital structure of the enterprise due to the dynamics and featuresof socio-economic and financial processes in Ukraine.

Classification of profit-sharing investment accounts

2017 ◽  
Vol 10 (3) ◽  
pp. 351-370 ◽  
Author(s):  
Aprilia Beta Suandi
Keyword(s):  
Financial Reporting ◽  
Sample Selection ◽  
Accounting Standards ◽  
Financial Statements ◽  
Profit Sharing ◽  
Islamic Banks ◽  
Content Type ◽  
Current Accounting ◽  
Islamic Financial Institutions

Purpose The purpose of this paper is to examine the classification of profit-sharing investment accounts (PSIAs) under various accounting standards, and determine whether Islamic banks maintain uniform practices when the same accounting standards are applied. It also aims to determine whether Islamic banks consider investment account holders (IAHs) important financial statement users by disclosing necessary information pertaining to PSIAs. Design/methodology/approach A sample composed of financial statements from 63 Islamic banks from 15 countries is compared with respect to the information related to PSIAs. Findings The results show heterogeneity of classification for PSIAs. Applying the same standards does not lead to the uniform classification of PSIAs when banks apply International Financial Reporting Standards, while financial statements applying Financial Accounting Standards by the Accounting and Auditing Organization for Islamic Financial Institutions are more similar. The perplexity in classifying PSIAs brings obscurity on the treatment for PSIA-related accounts, particularly returns attributable to IAHs. The fact of fewer disclosures pertaining to PSIAs in Islamic banks – which apply accounting standards not specifically tailored to Islamic finance – suggests that IAHs receive less attention under those accounting standards. Research limitations/implications The main limitation relates to the lack of financial statements available online and the possibility of sample selection bias toward larger Islamic banks. Originality/value This research contributes to the limited literature on accounting for PSIAs, and reveals the diversity of reporting methods for unique transactions in Islamic banks and the insufficiency of current accounting standards to guide them, which create possible challenges of comparability.

scholarly journals Implementation of PSAK 71 In Indonesia: Mutual Fund Investment In Insurance Subsector Companies

2021 ◽  
Vol 3 (2) ◽  
Author(s):  
Andy Kurniawan ◽  
Amrie Firmansyah
Keyword(s):  
Mutual Fund ◽  
Qualitative Method ◽  
Accounting Standards ◽  
Financial Statements ◽  
Total Sample ◽  
Financial Accounting ◽  
Insurance Companies ◽  
Additional Costs ◽  
Fund Investment

Changes in financial accounting standards in Indonesia can result in additional costs that companies, including financial companies, must bear. This study aims to review the implementation of PSAK 71 in insurance companies in Indonesia related to mutual fund investment ownership. The method used in this study is a qualitative method with content analysis. The analysis was conducted with data and information on the financial statements for 2020 and 2019 of insurance sub-sector companies available on www.idx.co.id. A sampling of this study employed purposive sampling with a total sample that amounted to 26 observations. This study concludes that the implementation of PSAK 71 does not affect the measurement and value of mutual fund investments. It only has an impact on the classification of mutual fund investments in the company's financial statements. Also, this study finds that 4 out of 13 insurance companies have implemented a mutual fund investment classification according to PSAK 71 (2017). Insurance companies that have not implemented PSAK 71 (2017) are due to the company's policy that stipulates to apply PSAK 62 (2017), which allows insurance companies to postpone the implementation of PSAK 71 (2017).

Implementation of foreign practice of regulation and accounting and reporting in Russia

2020 ◽  
pp. 215-222
Author(s):  
N. Yu. Orlova
Keyword(s):  
Comparative Analysis ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Statements ◽  
National Standards ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Tax Reporting ◽  
International Comparability

The reform of accounting and reporting in Russia began in the 1990s. The benchmark was taken on International Financial Reporting Standards, as many countries use these standards. IFRS have a number of advantages, such as simplicity, objectivity, international comparability. The author of the article gives the main problems, as a result of which, for almost thirty years, national standards have come very slightly closer to international ones. The author of the article gives the main problems, as a result of which, for almost thirty years, national standards have come very slightly closer to international ones. In the comparative analysis of accounting and the preparation of accounting and tax reporting according to Russian Accounting Standards (RAS) with International Financial Reporting Standards (IFRS), fundamental differences were revealed in the reflection of accounting objects in financial statements.

scholarly journals STRUCTURE AND VALUATION OF INTANGIBLE ASSETS AT DIFFERENT LEVELS OF STANDARDIZATION

2019 ◽  
pp. 145-156
Author(s):  
Valentyna YASYSHENA
Keyword(s):  
Intellectual Property ◽  
Property Rights ◽  
Intellectual Property Rights ◽  
Intangible Assets ◽  
Accounting Standards ◽  
Financial Statements ◽  
National Standards ◽  
National Standard ◽  
Expert Assessment ◽  
Different Levels

Introduction. Today, due to the large number of types of intangible assets that are presented in the valuation and accounting standards of different levels, it is difficult to determine their objective assessments. Purpose. The article is devoted to the research and systematization of IA objects, presented in the international, European and national standards of expert assessment and accounting, with the aim to find the ways of domestic standards improvement, as well as management of IA at the enterprise. Results. The structure of the IA objects, which are described in the International Standard for Assessments 210 “Intangible Assets”, the European Standards for Evaluation of the TEGoVA, the Professional Standards for the Evaluation of RICS, the National Standard No. 4 “Appraisal of Intellectual Property Rights”, the International Accounting Standard 38, Intangible Assets, and the Standards of Accounting 8 “Intangible Assets”, is analyzed. It is established that the objects of IA are shown in the international and national accounting standards, which are reflected in the accounting and financial statements of the entity, but they do not fully cover the market value of the enterprise. The list of objects of IA, which is not given in P (C) BO 8, is marked out and described, and accordingly they are not reflected in the financial statements of the enterprise. The article proposes a list of IA, which was formed on the basis of study of the nternational, European and national standards of expert assessment and can be taken into account by the enterprise for the estimation of business value and needs of IAmanagement. Conclusions. It is noted that the assessment of IA is not a sufficiently developed direction of professional property valuation; therefore, there is a need to mprove the National Standard 4 “Appraisal of Intellectual Property Rights” from its approximation to international practice. It has been determined that a standard for the assessment of IA, which will regulate not only the evaluation of intellectual property objects, but also other IA objects, which will be used in international practice, taking into account contemporary economic development, will be developed. The results of this article outlined the directions of further research in the area of improving the methodology of IA assessment.

scholarly journals ANALISIS IMPLEMENTASI PSAP NO.07 TENTANG AKUNTANSI ASET TETAP PADA BALAI PENYANTUNAN LANJUT USIA “SENJA CERAH”

2017 ◽  
Vol 12 (01) ◽  
Author(s):  
Misye Nikijuluw ◽  
Jantje Tinangon ◽  
Heince Wokas
Keyword(s):  
Accounting Standards ◽  
Financial Statements ◽  
Reliable Information ◽  
Fixed Assets

Goverment Accounting Standards (PSAP)  No. 07 is the standard for accounting of fied assets in order to generate reliable information in the financial statements. The purpose of this study is to determine whether or not the implementation of PSAP No. 07 is appropriate. The center for advanced arrangement of brightness in inventory cards,transactions,and financial statements. Method used is descriptive.Results show BPLU “Senjah Cerah” that the classification of disclosure is appropriate and disposal, fixed assets with after acquisition depreciates with PSAP No. 07 but it should be an actual fied assets value notKeywords : PSAP 07, Fixed Assets

scholarly journals ABOUT THE FINANCIAL REPORTING ON THE CAPITAL MARKETS IN THE EUROPEAN UNION: REQUIREMENTS OF USING THE IFRS AND THE EQUIVALENCE OF THIRD COUNTRY ACCOUNTING STANDARDS

2013 ◽  
Author(s):  
Aristita Rotila
Keyword(s):  
European Union ◽  
Financial Reporting ◽  
Capital Markets ◽  
Accounting Standards ◽  
Financial Statements ◽  
National Standards ◽  
The European Union ◽  
Consolidated Financial Statements ◽  
Community Capital ◽  
Single European Market

The need to build a single European market and to ensure the competitiveness of the community capital markets led to the involvement of European Union in the convergence process taking place on a global level in the realm of financial reporting. This paper is a study on financial reporting for the capital markets in the European Union by analyzing the accounting standards that need to be applied. Specifically, this paper highlights a number of issues concerning: the adoption of IAS / IFRS in the European Union and their compulsory aspect in preparing the consolidated financial statements for the companies listed on a regulated market; the requirement’s extension of using the IFRSs adopted in the European Union to the issuers of certain third countries involving a public offer of securities in European Union or performing transactions with securities on a community regulated market; the establish of a mechanism for the determination of equivalence of certain third country accounting standards with IFRSs in force at European level and, consequently, the possibility of using by some third country issuers, in preparing the consolidated financial statements submitted to the European markets, recognized national standards as equivalent to adopted IFRS.

scholarly journals EXPENDITURES AND EXPENSES IN BUDGETARY INSTITUTIONS: ESSENCE, ACCOUNTING PROBLEMS AND WAYS TO IMPROVE

2021 ◽  
Author(s):  
Nadia Topolenko ◽  
Yulia Lavreniuk
Keyword(s):  
Public Sector ◽  
Financial Reporting ◽  
Reporting System ◽  
Accounting Standards ◽  
Financial Statements ◽  
Accounting System ◽  
International Accounting Standards ◽  
The Public ◽  
Budgetary Institutions

In the conditions of public sector entities, much more attention is paid to accounting for income, expenditures and expenses, primarily by practicing accountants. The revenues of public sector entities represent the main source of their activities, and the costs make it possible to analyze their effectiveness and rationality of the use of budget allocations, so the organization of accounting for these objects determines the effectiveness of the activities of public sector institutions. The accounting system of public sector institutions is formed according to the modernization schemes approved at the legislative level. The public sector accounting plan and national accounting regulations (standards) in the public sector have significantly changed the established methods of accounting for the implementation of budgetary institutions. The economic classification of expenditures has also changed, the division of operations into exchange and non-exchange operations in accordance with international accounting standards for the public sector has also changed. The above has led to significant changes in the method of accounting for income, expenditures and expenses, which is due to the relevance of the study. The article specified and proposed new definitions of economic concepts of «income», «expenditures» and «expenses» of budgetary institutions. Various approaches to their interpretation are considered, attention is focused on the key problems of adaptation of accounting for income and expenses of budget funds managers in accordance with the implementation of the Strategy for modernization of the accounting and financial reporting system in the public sector for the period up to 2025 and approximation to the generally accepted principles of international practice. Changes in the methodology of accounting and display in financial statements of income and expenses of public sector entities were studied, the theoretical and practical aspects of improving the accounting of income, expenditures and expenses by public sector entities were highlighted. Proposals for improving the accounting of income and expenses in the public sector are given and substantiated.

Adoption of IFRS in Global Scenario

2016 ◽  
Vol 3 (1) ◽  
Author(s):  
Debarshi Bhattacharya
Keyword(s):  
United States ◽  
Capital Markets ◽  
Reporting System ◽  
Accounting Standards ◽  
Financial Statements ◽  
The United States ◽  
National Standards ◽  
Financial Accounting ◽  
Ifrs Adoption ◽  
Guinea Bissau

This paper aims to show overall position of the process of IFRS adoption worldwide as well as in India to harmonize the global financial accounting and reporting system. Worldwide homogeneous accounting standards have been set out by the IASB in form of IFRS. It is generally expected that worldwide adoption of IFRS will be beneficial to investors and other users of financial statements. Out of worldwide 140 jurisdictions as developed by IFRS Foundation, 116 jurisdictions require IFRS for all or most domestic publicly accountable entities in their capital markets. Of the 24 jurisdictions that do not require IFRS for all or most domestic publicly accountable entities, 14 already permit or require IFRS for at least some domestic publicly accountable entities. Only 10 jurisdictions currently do not require or permit IFRS for any domestic publicly accountable entities. One of those (Thailand) is in the process of adopting IFRS in full, and another (Indonesia) is in the process of convergence of its national standards with IFRS. The remaining eight that use national or regional standards are Bolivia, China, Egypt, Guinea-Bissau, Macao, Niger, the United States and Vietnam. Out of the 14 countries that have adopted IFRS for at least some (but not all) domestic publicly accountable entities, India is one of them.

scholarly journals Harmonisation efforts in the field of accounting of public sector

2011 ◽  
Vol 59 (4) ◽  
pp. 195-202
Author(s):  
Milena Otavová
Keyword(s):  
Public Sector ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Statements ◽  
National Standards ◽  
Accounting System ◽  
Financial Reporting Standards ◽  
Public Sector Accounting ◽  
Accounting Rules ◽  
The Difference

Increasing requirements for financial reporting of public sector led to a need to create a system that would provide relevant and reliable information for management of accounting entities of public sector and also to increase the quality of accounting and financial statements of public institutions. The International Public Sector Accounting Standards Board (IPSASB) is therefore creating high-quality financial reporting standards for public sector (IPSAS). Paper points out the ongoing reform of accounting in the field of public finances in the Czech Republic, where there are substantial changes in accounting rules and it also introduces new accounting methods. Regarding the fact that accounting of public sector is nowadays accounting system perhaps with the greatest potential of development, paper highlights the differences in financial reporting in accordance with Czech legislation and IPSAS system. It tries to catch the essential differences that arise from the financial legislation, the accounting basis and also from the content of financial statements. The paper also indicates the difference between Czech Accounting Standards for selected accounting entities that maintain accounts in accordance with Decree No. 410/2009 Coll. and International Public Sector Accounting Standards (IPSAS). There is also recommended approach to the creation of national standards with regard to international harmonization.

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