International Accounting

Abstracting and Indexing

Referativny Zhurnal VINITI RAS
Google Scholar

Online available



Cyberleninka (12 month OA embargo)

Estimated liabilities and provisions: Interpretation and accounting issues under the Russian and international standards

Vol. 19, Iss. 21, NOVEMBER 2016

Received: 27 May 2016

Received in revised form: 11 July 2016

Accepted: 26 July 2016

Available online: 17 November 2016


JEL Classification: M41

Pages: 2-18

Druzhilovskaya T.Yu. National Research Lobachevsky State University of Nizhny Novgorod, Nizhny Novgorod, Russian Federation

Importance The article focuses on issues relating to the interpretation and accounting of certain provisions and estimated liabilities within the framework of the Russian GAAP and IFRS.
Objectives The research formulates recommendations to address interpretation and accounting issues in relation to some types of provisions and estimated liabilities.
Methods The methodological framework includes a critical analysis of the current regulation of the way estimated liabilities are formed, comparison of various scientific viewpoints on accounting issues of provisions, estimated liabilities and liabilities for employees’ annual leaves.
Results I presented the results of analyzing the interpretation of economic substance of the provision concept in scientific literature. I explained the substantial difference between the economic substance of provisions and estimated liabilities and the need to change the regulation of the way provisions for deferred expenses are accounted within the Russian GAAP. The article proves the insufficiency of estimated liabilities assessment regulations under the system. The article also narrates about the comparison of the interpretation and accounting requirements in relation to liabilities for employees’ annual leaves under the Russian GAAP and IFRS.
Conclusions and Relevance The economic substance of provision cannot equate with that of estimated liabilities in relation to accounting of deferred expenses provision under the Russian GAAP. Interpretations of estimated liabilities and their economic substance under the Russian GAAP and IFRS are similar but still have considerable difference. Approaches to recognition and accounting of liabilities for employees’ annual leaves substantially differ under the Russian GAAP and IFRS, thus necessitating the revision of some regulations. The results are of applied and theoretical nature for financial accounting.

Keywords: provision, estimated liability, payment, annual leave


  1. Sheremet A.D. [Theoretical issues in accounting disciplines]. Bukhgalterskii uchet = Accounting, 2008, no. 2, pp. 60–62. (In Russ.)
  2. Mel'nikova L.A. Organizatsiya ucheta finansovykh rezervov khozyaistvuyushchikh sub"ektov [Setting up the procedure for accounting of entities' financial provisions]. Moscow, Pro-Soft-M Publ., 2003.
  3. Metodologiya i organizatsiya bukhgalterskogo ucheta i ekonomicheskogo analiza v usloviyakh rynochnoi ekonomiki: monografiya [Methodology for, and the process of accounting and economic analysis in the market economy: a monograph]. Moscow, Sovremennaya ekonomika i pravo Publ., 2004, 214 p.
  4. Lisovskaya I.A., Trapeznikova N.G. [Challenging lines of the balance sheet: accounting and recognition of estimated liabilities]. Vestnik Povolzhskogo gosudarstvennogo tekhnologicheskogo universiteta. Ser.: Ekonomika i upravlenie = Vestnik of Volga State University of Technology. Series Economy and Management, 2012, no. 2, pp. 69–77. (In Russ.)
  5. Efremova A.A. [The allowance for annual leaves is not canceled but rather works in a different way]. Bukhgalterskii uchet = Accounting, 2011, no. 8, pp. 88–91. (In Russ.)
  6. Evstratova I.V., Karpich M.A. [Allowance for annual leaves]. Bukhgalterskii uchet = Accounting, 2012, no. 4, pp. 84–91. (In Russ.)
  7. Druzhilovskaya T.Yu. [Applying IAS 37 to accounting and financial reporting]. Bukhgalterskii uchet = Accounting, 2012, no. 5, pp. 76–80. (In Russ.)
  8. Druzhilovskaya T.Yu., Druzhilovskaya E.S. [Preparation of the consolidated statement of financial position under IFRS]. Bukhgalterskii uchet = Accounting, 2015, no. 5, pp. 30–37. (In Russ.)
  9. Volkova I.N. [Formation and recognition of estimated liabilities for annual leaves in accounting records]. Molochnokhozyaistvennyi vestnik = Dairy Farming Journal, 2014, no. 2, pp. 73–78. (In Russ.)
  10. Gerasimova L.N., Chernyshova E.R. [The accounting mechanism for making an allowance for future annual leaves]. Innovatsionnoe razvitie ekonomiki = Innovative Development of Economy, 2013, no. 1, pp. 153–167. (In Russ.)
  11. Kulikova L.I. [Estimated liabilities: recognition and assessment]. Bukhgalterskii uchet = Accounting, 2011, no. 5, pp. 30–32. (In Russ.)
  12. Mizikovskii I.E., Maslova T.S. [Accounting of provisions for deferred expenses of State (municipal) institutions]. Audit i finansovyi analiz = Audit and Financial Analysis, 2015, no. 6, pp. 37–39. (In Russ.)
  13. Exposure Draft E59: Provisions, Contingent Liabilities, and Contingent Assets. In: Mark-to-Market Accounting: ‘True North’ in Financial Reporting. Routledge, 2004, pp. 139–141.
  14. Linsmeier T.J., Boatsman J.R., Herz R.H. et al. Response to IASC Exposure Draft, "Provisions, Contingent Liabilities and Contingent Assets". Accounting Horizons, 2008, vol. 12, iss. 2, pp. 192–200.
  15. Rees H. The IASB's Proposed Amendments to IAS 37. Accounting in Europe, 2006, vol. 3, iss. 1, pp. 27–34.
  16. Hsu A.W.-H., Wu C.-F., Lin J.-C. Factors in Managing Actuarial Assumptions for Pension Fair Value: Implications for IAS 19. Review of Pacific Basin Financial Markets and Policies, 2013, vol. 16, no. 1.

View all articles of issue


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

Journal current issue

Vol. 22, Iss. 8
August 2019