PRESENTATION AND DISCLOSURE OF FINANCIAL ASSETS IN THE FINANCIAL STATEMENTS
Abstract
In accordance with international financial reporting standards and national regulations, financial statements and notes to the financial statements are the primary source of information from which investors and lenders can make informed management decisions. In order to increase the reliability of the informations that are provided by the entities in the Statement of financial position and Statement of comprehensive income and Statement of profit and loss, the article considers and investigates the provisions of international financial reporting standards and the requirements of the national regulatory framework regarding the presentation and disclosure of accounting and analytical information on financial assets in financial reporting. It has been analyzed and proved that there are certain contradictions in the definition of the range of investors and lenders who rely on the financial statements to make reasonable management decisions on investments that they have provided or intend to provide to business entities. The article provides a comparative analysis of international financial reporting standards’ requirements and national requirements regarding the structure and content of information on financial assets, which is submitted in the financial statements. It is determined that the structure and content of information about financial assets disclosed in the notes, respectively, in the domestic legal framework does not meet the general requirements for the preparation of financial reporting forms and notes in accordance with the requirements of International Financial Reporting Standards, and therefore misleads stakeholders who prepare notes to the financial statements and makes such information less useful to them. It is defined that national requirements essentially differ from principles which are applied in the international practice that, as consequence, essentially influences quality of formation of the information on financial assets and its disclosure in the financial statements, in notes. It is certain that international and national accounting practices encounter significant inconsistencies in the presentation of financial assets in the financial statements and in the notes, which contain explanations of significant accounting policies and other clarifications.
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