International Accounting
 

Problems of applying valuation reserves in the systems of Russian and international standards

Vol. 20, Iss. 20, OCTOBER 2017

Received: 12 July 2017

Received in revised form: 3 September 2017

Accepted: 5 October 2017

Available online: 27 October 2017

Subject Heading: ACCOUNTING SYSTEMS ADAPTING

JEL Classification: M41

Pages: 1164–1182

https://doi.org/10.24891/ia.20.20.1164

Druzhilovskaya T.Yu. National Research Lobachevsky State University of Nizhny Novgorod, Nizhny Novgorod, Russian Federation tdruzhilovskaya@yandex.ru

Subject The article considers problems associated with the use of valuation reserves in RAS and IFRS.
Objectives The purpose of the study is to develop recommendations to address problems associated with the use of valuation reserves in accounting.
Methods The methodology of the study includes the critical analysis of modern regulation of issues related to the use of valuation reserves in accounting.
Results I present the analysis results of the use of valuation reserves to account for impairment of inventory, receivables, and financial investments in the system of Russian Accounting Standards; substantiate the shortcomings of methods of using the provision for tangible asset impairment to account for impairment of inventory. The paper gives reasons for insufficiency of regulations on application of provisions for doubtful debts and for impairment of financial investments, presents results of comparing the methods of accounting for impairment of inventory and financial assets under RAS and IFRS, offers proposals to improve the accounting treatment of impairment of inventories, receivables, and financial investments in RAS.
Conclusions The economic substance of valuation reserves is not consistent with the meaning of the word ‘reserve’ in the Russian language. It is advisable to review a number of regulations on the application of valuation reserves in system of statutory regulation.

Keywords: reserve, impairment, inventory, account receivable, financial investment

References:

  1. Mizikovskii E.A., Mizikovskii I.E., Polikarpova E.P. Bukhgalterskii uchet rezervov. Monografiya [Accounting for provisions: a monograph]. Ryazan, RSAU Publ., 2017, 216 p.
  2. Mizikovskii I.E., Polikarpova E.P. Razlichiya trebovanii normativnogo regulirovaniya bukhgalterskogo ucheta i nalogooblozheniya po formirovaniyu i ispol'zovaniyu rezervov. V sbornike: Aktual'nye problemy ekonomiki i bukhgalterskogo ucheta [Differences in the requirements of statutory regulation of accounting and taxation on reserve formation and usage. In: Topical issues of economics and accounting]. Nizhny Novgorod, National Research Lobachevsky State University of Nizhny Novgorod Publ., 2017, pp. 222–227.
  3. Chashin L.O., Klement’eva S.V. [The significance of provision for doubtful debt]. Baikal Research Journal, 2017, vol. 8, no. 1, p. 7. (In Russ.)
  4. Burtebaeva A.A. [On the issues of concern to allowance for doubtful accounts]. Izvestiya Instituta Sistem Upravleniya SGEU, 2016, no. 2, pp. 61–64. (In Russ.)
  5. Kas'yanova S.A. [Significant information provision in the provision for depreciation of material assets]. Sfera uslug: innovacii i kachestvo, 2013, no. 13, p. 8. (In Russ.)
  6. Petrova V.Yu. [Provisions for tangible assets impairment]. Bukhgalterskii uchet = Accounting, 2016, no. 7, pp. 22–27. (In Russ.)
  7. Odegova N. [Problems of creating a provision for impairment of quoted debt financial investments]. Problemy sovremennoi ekonomiki (Novosibirsk) = Problems of Modern Economics (Novosibirsk), 2014, no. 19, pp. 103–108. (In Russ.)
  8. Kruglova V.Yu. [Provision for impairment of financial investments]. Bukhgalterskii uchet = Accounting, 2017, no. 5, pp. 31–34. (In Russ.)
  9. Druzhilovskaya T.Yu. [Financial and business results statements of organizations in the light of current requirements of Russian and international standards]. Vestnik Nizhegorodskogo universiteta im. N.I. Lobachevskogo = Vestnik of Lobachevsky State University of Nizhny Novgorod, 2011, no. 3-1, pp. 222–229. (In Russ.)
  10. Druzhilovskaya T.Yu. [Profit and loss statements and total return reports in the Russian and international standards: How they correlate and how they are produced]. Vestnik Nizhegorodskogo universiteta im. N.I. Lobachevskogo = Vestnik of Lobachevsky State University of Nizhny Novgorod, 2012, no. 3-1, pp. 235–242. (In Russ.)
  11. Rozhnova O.V. Challenges of financial reporting. World Applied Sciences Journal, 2013, vol. 27, no. 13A, pp. 283–287.
  12. Kulikova L.I., Semenikhina N.B., Vetoshkina E.Y. Application of actuarial calculations when building a report on company's financial position. Academy of Marketing Studies Journal, 2016, vol. 20, Special Issue, pp. 96–102.
  13. Khakhonova N.N., Khaplanova E.Yu. [Comparative analysis of provisions in domestic and foreign practice]. Nauka i mir = Science and World, 2013, no. 1, pp. 8. (In Russ.)
  14. Mizikovskii E.A., Druzhilovskaya E.S. [Audit of accounting estimates of reporting indicators]. Auditorskie vedomosti = Audit Journal, 2010, no. 6, pp. 25–32 (In Russ.)
  15. Mizikovskii E.A., Druzhilovskaya E.S. [New requirements for asset valuation in Russian statutory accounting rules]. Auditorskie vedomosti = Audit Journal, 2013, no. 7, pp. 3–14. (In Russ.)
  16. Razvitie sistemy kompleksnogo ekonomicheskogo analiza organizatsii (tezisy). Metodologiya i organizatsiya bukhgalterskogo ucheta i ekonomicheskogo analiza v usloviyakh rynochnoi ekonomiki: monografiya [Developing the system of integrated economic analysis of organizations (highlights). Methodology and organization of accounting and economic analysis under market economy: a monograph]. Moscow, Sovremennaya ekonomika i pravo Publ., 2004, 214 p.
  17. Sheremet A.D. [Theory in accounting disciplines]. Bukhgalterskii uchet = Accounting, 2008, no. 2, pp. 60–62. (In Russ.)
  18. Klyauster A.V. [Homogeneous and Heterogeneous Classification Features of Reserve Account]. Vestnik Khakasskogo gosudarstvennogo universiteta im. N.F. Katanova, 2012, no. 2, pp. 71–75. (In Russ.)
  19. Lisovskaya I.A., Trapeznikova N.G. [Problem lines of the balance sheet: Recording and disclosing the provisions]. Vestnik PGTU = Bulletin of Volga State University of Technology, 2012, no. 2, pp. 69–77. (In Russ.)

View all articles of issue

 

ISSN 2311-9381 (Online)
ISSN 2073-5081 (Print)

Journal current issue

Vol. 20, Iss. 21
November 2017

Archive