EQUITY CAPITAL: PROBLEMS OF THEORY AND PRACTICE OF ACCOUNTING

2021 ◽  
Vol 2 (2) ◽  
pp. 78-82
Author(s):  
Kh. Sh. NURMUKHAMEDOVA ◽  
Keyword(s):  
Financial Statements ◽  
Equity Capital ◽  
Theory And Practice ◽  
Methodological Problems

This article is devoted to the theoretical and methodological problems of compiling information on the organization's equity capital and its reflection in the financial statements.

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”.

Theory and practice of analysis of financial statements of organizations

2021 ◽  
Author(s):  
Natal'ya Parushina ◽  
Oksana Gubina ◽  
Vitaliy Gubin ◽  
Inna Butenko ◽  
Natal'ya Suchkova ◽  
...  
Keyword(s):  
Higher Education ◽  
Graduate Students ◽  
Financial Services ◽  
Financial Statements ◽  
Theory And Practice ◽  
Financial Accounting ◽  
Federal State ◽  
Educational Standards ◽  
Universities And Colleges ◽  
Regulatory Documents

The textbook discusses the theoretical and practical aspects of the analysis of financial statements of organizations in various fields of activity. The theory and practice of the analysis of reporting forms are based on the use of modern regulatory documents in the field of accounting and tax accounting, auditing, statistics. The textbook reflects the features of the analysis of financial, accounting, tax, statistical reporting of organizations based on the use of a system of analytical indicators and the interconnection of reporting forms. Examples of execution of analytical documents of the economist-analyst are given, which allow to visualize the process of conducting and summarizing the results of the analysis of reporting indicators in organizations of various types of activity. Meets the requirements of the federal state educational standards of higher education of the latest generation and includes a course of lectures, discussion questions, tests, practical situations and tasks. For undergraduate and graduate students, graduate students, teachers of economic universities and colleges, auditors, accountants, economists, employees of tax, statistical and financial services.

Assessing Business Zakat At Pusat Zakat Selangor: Between Theory and Practice

2003 ◽  
Vol 1 (1) ◽  
pp. 33-48 ◽  
Author(s):  
Rashidah Abdul Rahman ◽  
Rohila Awang
Keyword(s):  
Financial Statements ◽  
Theory And Practice ◽  
Islamic Philosophy ◽  
Wealth Transfer ◽  
Historical Cost ◽  
Current Value ◽  
Continuous Use ◽  
Value Measurement

The main objective of this study is to determine the value measurement used by zakat collection centres, particularly Pusat Zakat Selangor (PZS), in measuring business zakat among companies owned by Muslims in Selangor territory. The study found that PZS assessed zakat from companies financial statements based on historical cost, and not current value as hypothesised by previous researchers. The continuous use of historical cost may lead to negative wealth transfer for zakat beneficiaries particularly in time of rising prices. Even though certain adjustments are made to the assessment, however the purpose of such adjustment is merely to reflect the Islamic philosophy of the implementation of halal and haram as well as different views of Islamic Accounting and Conventional Accounting in recognising income and expenses.

scholarly journals Study of professional and emotional burnout in foreign psychological-pedagogical theory and practice

2020 ◽  
Author(s):  
Behun-Trachuk Larysa
Keyword(s):  
Human Rights ◽  
Social Activity ◽  
Theory And Practice ◽  
Empirical Methods ◽  
Professional Stress ◽  
Methodological Problems ◽  
Main Factors ◽  
Pedagogical Theory ◽  
Emotional Burnout

One of the acute problems in modern psychological and pedagogical theory and practice is the problem of emotional burnout of pedagogical workers In the process of studying emotional burnout, we first of all encounter with such general methodological problems, such as: the need to take into account all the main factors that are important for the emergence and formation of emotional burnout in a specialist, with the fact of variability of the main symptoms of emotional burnout at different stages of its formation (changes in thinking, behavior, feelings and health); taking into account probable moments in the development and formation of emotional burnout, etc. In our opinion, the following approaches can be solved by solving common methodological problems: interdisciplinary, systemic, empirical, personal-social-activity, situational. The article uses a complex of theoretical and empirical methods of analysis, systemization and generalization. Scientific understanding of foreign experience in studying the phenomenon of burnout, allowed to determine the degree of negativity of long-term professional stress, emotionally charged conditions of concert and stage activities and a large number of unforeseen situations of artistic and pedagogical interaction as a determinant of psychophysical burnout, emotional and intellectual I am a specialist. Thus, the approaches analysed in this article to the study of “emotional burnout” show that burnout manifests itself in various spheres of personality (cognitive, motivational, human rights to work), and there is a connection between burnout and exacerbation in all these areas, it seems to us important. Further research requires the development of technologies to overcome the syndrome identified by Ukrainian scientists.

scholarly journals Relevance of financial reporting quality - Theory and practice in Vietnamese enterprises

2017 ◽  
Vol 1 (Q2) ◽  
pp. 119-128
Author(s):  
Thuan Quoc Pham
Keyword(s):  
Conceptual Framework ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Reporting Quality ◽  
Professional Associations ◽  
Financial Statements ◽  
Theory And Practice ◽  
Financial Information ◽  
Financial Reporting Quality

Financial reporting quality is one the most interesting topics which draw a great deal of attention to researchers and scientists in the field of accounting (Céline Michailesco, 2010). In the review of research on financial information from 1980 to 2016, Pham (2016) found that characteristics of useful financial information are relatively diverse with as many as 15 attributes being identified. In addition, he also found that all research in any period has employed the characteristics published by professional associations such as American Institute of Accountants, Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB as theoretical basis. Research on the quality of financial information is diverse yet have many things in common, above all is the Relevance characteristic which considered to be the basic qualitative component of the quality of financial information in financial statements. Conceptual Framework officially issued by FASB & IASB in 2010 (FASB & IASB 2010) has further confirmed Relevance is the basic quality component of financial information. Compared with previous announcements, there has been a considerable change in the criteria and attributes used to evaluate the appropriateness of Relevance characteristic of financial information in financial statements. This study aims at confirming the importance of the Relevance component in evaluating the quality of financial information, clarifyingg the characteristics of Relevance measurement before and after Conceptual Framework 2010 and constructing relevant scales as well as measuring the qualitative characteristic of Relevance among enterprises in Vietnam.

Equity Capital-Structure-Based Evaluation Method

2012 ◽  
Vol 2 (2) ◽  
pp. 299
Author(s):  
Hassan El Ibrami ◽  
Ahmed Naciri
Keyword(s):  
Evaluation Method ◽  
Structural Model ◽  
Financial Statements ◽  
Equity Capital ◽  
Financial Statement ◽  
Convergence Conditions ◽  
Real Options Theory ◽  
Valuation Method ◽  
Special Cases ◽  
Debt Valuation

Abstract The main purpose of this paper is to theoretically compare three structural models presenting several similarities and using financial statements within the context of real options theory. The models are those suggested by i) Leland (1994); ii) Goldstein, Ju and Leland (2001) and iii) Sarkar and Zapatero (2003). The analysis emphasizes convergence conditions of the three models based on their respective dynamic equations. The results show that the first two models represent special cases of the third one. The paper also presents a new equity and debt valuation method. Keywords: Structural model, Financial statement, Equity, EBIT, Mean reversion, Contingent claim, Convergence.

scholarly journals The gearing adjustment of AC 201: Comparison with SSAP 16 and Philips 1981

1990 ◽  
Vol 21 (3) ◽  
pp. 96-101
Author(s):  
M. A. Van Hoepen ◽  
I. J. Lambrechts ◽  
F. J. Mostert
Keyword(s):  
Detrimental Effect ◽  
Investment Decision ◽  
Financial Statements ◽  
Equity Capital ◽  
Capital Maintenance ◽  
Short Term ◽  
Financial Investment ◽  
The United Kingdom ◽  
Inflation Accounting ◽  
Over Time

The objective with this article is to analyse and compare the method of calculating the gearing adjustment as applied in the United Kingdom (SSAP 16), the Netherlands (Philips 1981 version) and South Africa (Guideline AC 201). It could be read together with Van Hoepen, Lambrechts and Mostert (1989). The gearing adjustment is an important step in inflation accounting because it recognizes the fact that a certain portion of assets could be financed in such a way that the detrimental effect of inflation is decreased. Important differences in gearing adjustment methods could result in different conclusions drawn from the analysis of financial statements and could consequently influence the financial investment decision, especially in a period of galloping inflation. The main conclusion from the comparison of the three systems is that they result in the same total adjustments over a period of time but that there are important differences over the medium and short term as well as in the present values of these adjustments. The three systems result in full capital maintenance of equity capital over time, in the case of both net monetary liabilities and assets.

scholarly journals Reality of Vietnam’s Commercial Bank Performance and Soundness

2015 ◽  
Vol 22 (02) ◽  
pp. 48-69
Author(s):  
Canh Nguyen Thi ◽  
Hien Nguyen Thi Diem
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Financial Statements ◽  
Equity Capital ◽  
Rating System ◽  
Bank Performance ◽  
Return On Assets ◽  
Banking Efficiency ◽  
Return On Equity ◽  
Bad Debt

This paper employs CAMELS rating system to evaluate the performance and soundness of Vietnam’s commercial banks. Based on the analysis of data from financial statements of the banks in the years 2005/2008–2013, the research results show that the total assets and equity capital of Vietnam’s commercial banks have increased, but their efficiency is not yet high and tends to gradually decrease. The expense-to-revenue ratio was higher than 80% while the return on assets (ROA) ratio remained around 1% and had a tendency to sharply fall to 0.77% and 0.56% in 2012 and 2013 respectively. The return on equity (ROE) ratio, in addition, fell steadily in 2012 (7.42%) and 2013 (5.84%). The findings also indicate that profitability of state-owned commercial banks is higher than that of private joint-stock ones. Additionally, risk degree was high because of a high bad debt (around 4%) and low liquidity (around 90% of loan-to-deposit ratio). In addition to its analysis, the research offers sevaral recommendations that aim at improving banking efficiency and mitigating risk as for Vietnam’s commercial banks.

scholarly journals Problems of Identification and Analysis of Transaction Costs at the Economic Entity Level

2021 ◽  
Vol 9 (524) ◽  
pp. 158-163
Author(s):  
T. V. Herasymenko ◽  
Keyword(s):  
Transaction Costs ◽  
Financial Statements ◽  
Theory And Practice ◽  
Practical Significance ◽  
Financial Investment ◽  
Existing Problems ◽  
Institutional Approach ◽  
Economic Entity ◽  
Analysis And Synthesis ◽  
The Impact

The article is aimed at identifying and analyzing transaction costs when making management decisions at the level of an economic entity. In the course of the research, the following methods were used: grouping – in determining the main forms of transaction costs based on existing classifications; generalization – when systematizing information on the identification of approaches to the assessment and measurement of transaction costs; structural and logical – to determine the place of transaction costs in the structure of the enterprise’s costs; analysis and synthesis – to substantiate the recommendations for displaying information on the level of transaction costs at the enterprise in financial statements. The main forms of transaction costs on the basis of existing classifications are researched. Information on identification of approaches to valuation and measurement of transaction costs is systematized. The place of transaction costs in the structure of the enterprise’s expenses is determined. Recommendations on displaying information on transaction costs at the enterprise in the financial statements on the basis of their occurrence in a certain sphere of activity of the market entity (transaction costs of operational, financial, investment activities) are substantiated, which represents the scientific novelty of the research. It is concluded that the institutional approach, in particular application of the theory of transaction costs before their valuation and preparation of financial statements, allows not only identifying possible solutions to existing problems in accounting theory and practice, but also seting fundamentally new tasks that require non-standard solutions. The practical significance of the obtained research results is to determine the impact of transaction costs on the efficiency of the functioning of market entities and substantiate recommendations for displaying information about their level at the enterprise in financial statements.

Conceptual principles: Contractual obligations and liabilities as items of financial reporting

2020 ◽  
Vol 23 (7) ◽  
pp. 726-741
Author(s):  
V.S. Plotnikov ◽  
S.S. Kanapinova
Keyword(s):  
Financial Reporting ◽  
Institutional Economics ◽  
Balance Sheet ◽  
Financial Statements ◽  
Theory And Practice ◽  
Integrated Reporting ◽  
Economic Resource ◽  
Accounting Practice ◽  
Business Operations ◽  
Contractual Obligations

Subject. The article provides a rationale for reporting obligations and liabilities in accounting records as economic phenomena of entity's business operations and items of financial reporting. Objectives. We explain how the substance of obligations and liabilities is defined in accounting, implying that the economic phenomena should be recognized in financial statements more completely. The study is to unveil the substance of obligations and liabilities so as to harmonize the regulatory and positive economy in the accounting process. We determine their purpose as part of accounts when they are aggregated into the balance sheet. Methods. We determined promising lines of the accounting theory and practice by analyzing the institutional economics, Conceptual Framework for the Financial Reporting, Integrated Reporting Concept that amplified the scope of accounting, since they recognize economic phenomena of business operations, such as obligations and liabilities. Results. Contractual obligations should be considered as a consequence of obligations that an entity has due to part events. The substance of the contractual obligations depend on the economic resource to be transferred in the future. Contractual obligations should be entered into accounting records and measured as of the signing date of the contract. The economic substance of the contractual obligations significantly differs from the accounting view of accounts receivable and payable. Conclusions and Relevance. We believe it is necessary and possible to develop the accounting practice by introducing new economic phenomena, such as obligations and liabilities. They help change the retrospective format of the information as new items get added.

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