Financial statements as the main source of information on the enterprise activity

Issue: № 11/1, 2021

Doi: https://doi.org/10.37634/efp.2021.11(1).5

The essence of effective management of each business entity depends primarily on transparency and disclosure of information about its financial and economic activities. The financial report itself covers all important information about the state of the enterprise and provides an opportunity to obtain financial status with it by the interested user for further analysis and decision-making on further activities. As a rule, investors of creditors, state bodies, representatives who are preparing in construction with the business entity are interested in financial reporting. In order to provide more detailed and informative financial reporting to users, it is necessary to compile it with international standards, which act as tools for globalization of the economy and contribute to the development of global economic relations. During 2020–2021, the activities of enterprises took place in extremely difficult conditions, which is why the pandemic significantly affected the financial reporting indicators. Today, there is an appropriate use of intelligent technology and computer technology in the formation of financial statements. Financial statements based on taxonomies of financial statements for IFRS are prepared and presented in a single electronic format using Extensible Business Reporting Language (XBRL). XBRL is a generally accepted international standard for presenting financial statements in accordance with IFRS in electronic form. With the help of IFRS, Ukrainian companies have more effectively solved the following tasks: attracting investments and loans from the world's largest companies and banks, the ability to service financing from foreign banks and other organizations; placement of shares on international stock exchanges; providing the company's management with reliable information for making management decisions, as well as evaluating their adoption. Thus, today the economy of Ukraine depends on the choice of IFRS as a conceptual basis for accounting and its practical implementation. After all, the financial statements are fully open to internal and external users to make informed management decisions regarding cooperation with the relevant entity.

Keywords : financial statements, financial condition of the enterprise, IFRS, internal and external users, XBRL, balance sheet (statement of financial position)

References:

1. Law of Ukraine “On Accounting and Financial Reporting in Ukraine”, dated 16.07.99 № 996–XIU, as amended. URL: https://zakon.rada.gov.ua/laws/show/996–14#Text (in Ukrainian).

2. Kulik V.A., Levchenko Z.M., Ermolaeva M.V. Taxonomy of financial statements according to international standards. Scientific Bulletin of Kherson State University. Series: Economic Sciences. 2021. Issue 41. P. 82. (in Ukrainian).

3. Ozeran A.V. Harmonization of financial statements of enterprises with international standards and management needs: author's abstract … Doctor of economic sciences: 08.00.09. Kyiv, 2016. 33 p. (in Ukrainian).

4. Official website of McDonald’s on consolidated financial statements. URL: https://www.mcdonalds.com/content/dam/ua/mediaassets/documents/7.1.pdf (in Ukrainian).

5. Pilipenko L.M. The system of public reporting of corporations in a post-industrial economy: dis. … Doctor of economic sciences: 08.00.09 / Lviv Polytechnic National University. Lviv, 2016. 456 p. (in Ukrainian).

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