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If management has a significant uncertainty during its analysis based on information about events or conditions that may affect the entity's ability to continue as a going concern, this should be stated in a note to financial statements, naming the reasons.

If the financial statements are not prepared on a going concern basis, this should also be disclosed in a note describing the reasons why the entity is not considered to be a going concern and the basis of measurement used to prepare the financial statements.

The principle of commensurability.

Object accounting this or that fact economic life can only become if it has monetary value. Of course, in economic life in general, and in accounting in particular, other measures (natural, labor) are also widely used, but it is only possible to generalize, analyze, and compare the results of individual operations and the activities of the enterprise as a whole using a general measure. For many centuries, in all countries of the world, money has been used as such a meter.

The principle of periodicity.

This principle lies in the fact that in order to summarize, analyze and compare results, economic activities must be artificially divided into periods. That is, the continuous (in accordance with the previously discussed principle) activity of an enterprise consists of certain periods of time - periods. This principle is important for preparation accounting information, which cannot be compiled based on the principle of going concern. After all, both the management of the enterprise, and its owners, and tax authorities. And all other users financial information interested in the results of activities. If these results are not divided into periods, it will be impossible to trace the dynamics of changes and, based on the analysis, draw certain conclusions necessary for making a decision.

In our country, as well as in most other countries, the main period for determining the results financial activities enterprises is calendar year. In the Law of Ukraine “On Taxation of Enterprise Profit” it is called a financial year. However, not always fiscal year coincides with the calendar, which confirms the convention of any division into periods. So, for example, for accounting in Ukraine the intermediate period is a quarter, since in accordance with the current regulatory documents financial statements compiled and submitted to the relevant authorities quarterly.

The principle of historical cost.

This principle determines the priority of asset valuation based on the costs of their production and acquisition, that is, according to their actual cost.

But for inventories, for example, there is a valuation rule at the lower of two values ​​- at historical cost or at net worth implementation.

Valuation of an asset at the lower of two valuations is explained by the fact that an asset is recognized on the balance sheet when it is probable that the entity will receive future economic benefits. Therefore, valuing assets at least value indicates the real value of the asset.

The cost principle is characterized by objectivity. Since the assessment is based on documents; it is associated with the principle of duality. According to which the facts of economic life must be recorded in the accounting of that assessment. Which really suits them.

Unlike cost, market value is largely subjective. In addition, based on the principle of going concern. The company is not focused on the quick sale of its funds. These funds are used to carry out ongoing economic activity, which means there is no need to determine market value such funds.

Seb. acquired assets = purchase price + duties + taxes that are not reimbursed + transportation costs - discounts

Self-manufactured assets = direct manufacturing costs + manufacturing overhead

Essence over form- means that a transaction or events must be accounted for and reported in accordance with their economic substance, not only on the basis of legal form.

This approach warns against making the legal interpretation of events and transactions that are reflected in the accounting books absolute. Since the essence of transactions and other events is not always adequate to what follows from their legal form. For example, transfer of an asset to finance lease does not mean the transfer of ownership of it from the lessor to the lessee. But in practice, this asset is credited to the lessee’s balance sheet, since all the benefits and risks associated with the use of this asset have actually transferred to the latter.

Conversely, usually the sale of products means the transfer of ownership to another party. However, if the agreement provides further use the seller of the economic benefits embodied in the asset sold, recording this transaction as a sale in the financial statement.

Accrual principles and compliance The requirements of IAS 1 to prepare financial statements (other than cash flows) on an accrual basis means that the results of transactions and other events should be recorded in the accounting records and financial statements when they occurred, and not when the enterprise receives income or expenses.

This approach to the preparation of financial statements makes it possible to inform users not only about the receipt or payment of funds in the past, but also about mandatory expenses funds or their receipts in the future.

Based on this principle, income ensures the determination of the financial result of the reporting period when they were earned, and expenses - on the basis of their corresponding income.

The principle of correspondence ensures the determination of the financial result of the reporting period by comparing the income of the reporting period with the expenses that were incurred to obtain these incomes.

However, not all expenses can be directly linked to a specific income. Therefore, the application of the matching principle does not mean that it is possible to identify items on the balance sheet that do not meet the definition of assets and liabilities.

In this regard, expenses should be reflected in the “Profit and Loss Statement” in that period. When did they arise?

The principle of prudence.

The essence of the principle is that it requires a certain degree of caution in estimating so that, in the event of uncertainty, assets or income are not overstated or liabilities or expenses are understated.

The essence of the principle of prudence is a readiness to take into account potential losses to a greater extent than profits, which is expressed in the creation of reserves and in the valuation of assets at the lowest possible cost, and liabilities at the highest.

However, compliance with the principle of prudence is based on the idea that if there is uncertainty in choosing an approach to accounting for a particular indicator, the user’s interests will be most in line with the choice of the one that gives a less optimistic picture of the state of affairs in the enterprise.

However, prudence means making hidden or excessive reserves, modestly understating assets or income, or overstating liabilities or expenses, because doing so would make the financial statements unreliable.

The principle of prudence also does not imply the recording of unrealistic income and expenses. The question of changing their value arises at the moment when the value of assets has decreased and the possibility of additional expenses or there is uncertainty about repaying obligations. Subject to the principle of prudence, real income and expenses are reflected in accounting, taking into account adjustments for expected changes in their values.

Currently, there is a lot of criticism in accounting publications regarding the application of the principle of prudence in Ukraine. Indeed, it seems strange to us that the requirement that income not be overstated. After all, no one has tried to show big profits so far (so as not to raise questions among tax inspector) and did not intend to underestimate expenses.

1.4. Fundamental Principles accounting

Accounting Principles – these are the initial, basic provisions of accounting, which underlie the development of rules for accounting and reporting and are enshrined in standards and regulations governing accounting. Based on the basic principles, the organization's accounting policies are developed and financial reporting indicators are formed.

Let's consider the accounting principles underlying accounting in the Russian Federation.

In PBU 1/98, accounting principles are divided into two classes: assumptions and requirements.

List of assumptions(according to PBU 1/98) provides:

1) property isolation of an economic entity;

2) continuity of activity;

3) the sequence of application of the selected approaches ( accounting policy);

4) time certainty of recording business transactions.

List of requirements for accounting:

Cost principle . In accordance with this principle, funds are accounted for at the price of acquisition or creation (actual cost), which serves as the basis for assessing the future use of funds.

The actual costs incurred include, in particular, the costs of acquiring the property itself, interest paid on the commercial loan provided during the acquisition, markups (surcharge), commissions (cost of services) paid to supply, foreign economic and other organizations; customs duties and other payments, costs of transportation, storage and delivery carried out by third-party organizations.

The principle of monetary expression . Accounting operates only with those facts that can be measured in monetary terms with a sufficient degree of objectivity.

Operating organization principle . In accounting, unless the contrary is certain, an organization is assumed to operate indefinitely. Based on this principle, reporting is drawn up, where property is shown from both sides: by composition and location and by sources of formation. The need to estimate the amount of proceeds from the sale of an organization’s property arises only when it is sold or closed. In all other cases, this information is considered not of interest. This principle is closely related to the cost principle: if the organization is not recognized as a going concern, the application of the cost principle is impossible. What is more important is not the cost, but selling price property immediately after the preparation of financial statements.

Principle of organizational integrity . This principle presupposes the property separation of the organization from the property of its owners and other legal entities. An economic entity is legally independent in relation to its owners and other economic entities. Accounting is limited to the organization and does not apply to the personal funds of owners and other legal entities.

Implementation principle . In accounting, profit is considered to be received when goods or services have been received by the customer and he has assumed obligations for them. To reflect income in accounting, it is necessary that the organization has the right to receive funds. It arises not at the moment of signing the contract and paying for it, but at the moment of transfer of ownership of the shipped products (work performed, services rendered).

The principle of duality . To understand this principle, consider the balance equation.

To carry out its activities, any organization needs property or, in accounting terminology, funds. The funds owned by an organization are called assets. Part of these funds is provided by the owner. The total amount of funds contributed by him is called capital (own). If the owner is the only one who contributed funds, then the equation will be fair:

where: A – assets;

Sk – own capital.

In real practice, part of the assets is contributed by someone else besides the owner. The organization's debt for these assets is called obligations. In this case formal balance equation takes the following form:

A = P = Sk + O,

where O – obligations.

The sums of the left and right sides are the same. This equation formulates the basic approach to presenting data in accounting - the same thing is considered from two points of view: on the one hand, what the funds (assets) are, on the other hand, where they came from (capital + liabilities).

Thus, any business transaction is considered in two aspects: one is represented by assets, the other - by source. These two aspects are always equal to each other. A method of recording transactions in which the fact of economic activity is recorded by the debit of one account and the credit of another (or the same) account is called double entry .

Principle of accumulation . The essence of this principle is that under net profit organizations understand the difference between income and expenses, and not between money not received and money spent. The greatest difficulty in practice is to reconcile expenses and income.

Materiality principle . Let's look at this principle with an example. Let's say an organization purchased a notepad for business records with two spare blocks that will be used over a period of time. Its cost will decrease as paper is consumed. You could record these costs as you use the paper. However, the price of a notebook is so low that such accounting is meaningless. Therefore, the cost of the notebook will be expensed in the period in which the notebook was purchased. The box of matches will also be expensed in the period in which it was purchased.

Principle of prudence (conservatism ). This principle is based on accounting uncertainty. This is due to the fact that accounting operates with quantities that (for the most part) will exist in the future. The disclosure of accounting information between past and future reporting periods is made based on certain assumptions.

Principle of constancy . This principle is vital for any organization that seeks to present accounting information objectively. According to the principle of consistency, an organization that chooses an accounting treatment method certain type data must strictly adhere to this method when processing all data of this type.

The selected methods are fixed in the accounting policies of the organization and are valid during the reporting year. However, this does not mean that the organization cannot change its chosen methods. They can be changed, but only on sufficiently serious grounds.

The principle of timeliness . This principle means that data in accounting must be presented without delay so that the user can make the necessary decision.

Completeness principle . According to this principle, when reflecting accounting information, omissions and withdrawals are unacceptable. Otherwise, such information may lead to incorrect management decision and apply financial damage organizations.

Principle of value, reliability and comparability . The value of information lies in its influence on the user's decision making regarding the organization. At the same time, a distinction is made between predictive value (the ability to make a forecast based on information), the value of confirming the forecast, and timeliness.

Information that contains no significant errors is considered reliable, i.e. information that meets the requirements of neutrality, truthful presentation, completeness and adequacy (reflection of the economic content of business transactions in the corresponding assessment).

The comparability of the indicators contained in the financial statements with the corresponding indicators of previous periods or indicators of other organizations is ensured by the consistency of the chosen accounting methods.

Priority of content over form means that compliance with the legal norm and the economic feasibility of the completed facts of economic activity should prevail over the form regulated by the relevant regulatory documents. Although this requirement has been announced, its implementation in real life seems very problematic.

Consistency proceeds from the assumption that current accounting data in the context individual species assets and sources of formation must always correspond to the turnover and balance of the economically homogeneous accounting object that unites them on the first day of each month.

Economy and rationality imply that the benefits of using accounting information must be greater than the costs of obtaining it. Although these costs, and especially the benefits, are often very difficult to estimate, the break-even principle of accounting work should generally be respected.

Documentation of economic events means that every fact of economic activity must be recorded in writing. The absence of a document means that the economic event did not take place. And only if it is established that any event is not reflected in accounting, then this should be considered as the result of an intentional or unintentional distortion of accounting data or the inability of accounting to influence individual events (for example, the occurrence of losses of inventory items due to natural loss) .

The problem of interpretation and correct use financial reporting data generated using generally accepted principles requires studying their content and features of manifestation in the market environment, since such information is based on approximate calculations, conditional classifications, subjective generalizations and distributions. At the same time, the usefulness of information increases if it is timely and predictable in nature and feedback. One of the principles of accounting, which allows for the formation of its elements using certain subjective judgments and calculations, is the principle of prudence. Therefore, in the context of the final establishment of market relations in Ukraine, the problem of applying the principle of prudence in accounting is very relevant.

The principle of prudence was often and in detail analyzed by both domestic and foreign scientists, such as Y. Sokolov, V. Paliy, A. Suvorov, A. Khorin, because compliance with it depends financial position, financial results and amount equity reporting period that generate future economic benefits.

The purpose of the article is to study the conditions and criteria for the functioning of the principle of prudence in accounting, to establish relationships with other accounting principles.

Conceptual Framework consider prudence as a qualitative characteristic, explaining its application and content as follows: persons preparing financial statements must take into account the uncertainty that inevitably accompanies many events and circumstances, such as repayment accounts receivable, the likely life of the machinery and equipment and the number of possible warranty claims, etc. Prudence is the exercise of a certain amount of care in making the judgment necessary to make a valuation under conditions of uncertainty so that assets or income are not overstated or liabilities or expenses are understated.

According to the Law of Ukraine on Accounting:

Prudence is the application in accounting of valuation methods that should prevent underestimation of liabilities and costs and overestimation of assets and income of the enterprise.

An almost similar definition of this principle is given in P(S)BU 1 “ General requirements to financial reporting”, which stipulates that this principle is applied in accounting, while at the same time ignoring the name of the standard itself.

Judgments regarding this principle are characterized by such criteria for its recognition as uncertainty, caution and neutrality.

1) The uncertainty criterion is characterized by the appropriateness and compliance of accounting policies regarding sizing and valuation individual assets and liabilities, income and expenses that characterize the financial position and financial results of a business entity on reporting date taking into account future economic benefits and losses. Future economic benefits from maintaining assets are calculated based on their fair value, the uncertainty of which is reflected in the lack of reliable potential measurement in future reporting periods, which makes the amount of liabilities arising from the acquisition of controlled resources uncertain.

Valuation as a qualitative characteristic of financial reporting elements in market conditions tends to constant change under the influence, as a rule, external factors, which introduces some uncertainty into the calculation of future economic benefits.

The very approach to providing projected information about the future economic benefits of a business entity already contains relative uncertainty about its income and expenses, the possible structure of assets and liabilities, as well as possible financial relations with business participants.

Thus, uncertainty is a judgment about the qualitative (estimation) and quantitative (definition, recognition) parameters of elements of the financial statements about which there is no clear certainty regarding both past and future events.

2) The criterion of caution concerns the determination of the amounts of income and expenses of the reporting period by applying appropriate accounting estimates for the conditions of the enterprise (term beneficial use(operation) of non-current assets, determining the coefficient of doubt for assessing accounts receivable, assessing the amount of collateral (reserves) that are created in accordance with P(S)BU 16 “Expenses”, and other changes in accounting estimates).

Care in calculating dimensions and structure financial results(from operating, investing, financial activities) is ensured by exercising careful judgment regarding their components.

3) Information about economic resources that an entity controls as a result of past events is useful in determining the entity's ability to generate cash and their equivalents in the future. Prudence in the formation of financial reporting indicators to characterize possible economic benefits is ensured by compliance with the criterion of neutrality of information. According to IAS, neutrality is qualitative characteristics financial reports, which does not contain preconceived judgments on individual elements.

Financial statements are not neutral if, as a result of the selection or presentation of information, they influence decision making or judgment with a view to achieving a predetermined result.

The relationship of the principle of prudence with other principles of financial reporting is manifested in the following:

· The principle of substance over form: recognizing and measuring elements of financial statements at fair value.

· The principle of a single monetary measurement: expression in in cash elements of financial statements that form essential information.

· Going concern principle: valuation of assets and liabilities based on the assumption that the enterprise will continue to operate in future periods.

· The principle of historical (actual) cost: evaluation of elements of financial statements when they are recognized at historical cost.

· The principle of accrual and matching of income and expenses: income of the reporting period is recognized if expenses have been incurred to obtain it.

· The principle of full coverage: reflection of assets and liabilities, income and expenses in compliance with the qualitative parameters of financial reporting.

· The principle of consistency: compliance with the conditions for determining income and expenses, assessing assets and liabilities.

· Periodicity principle: review of economic benefits from contained assets and liabilities, determination of income and expenses for reporting periods.

Formation useful information in compliance with established principles financial reporting under the influence of the principle of prudence allows us to establish the limits of the use of subjective judgments and calculations in the process of assessing and determining its individual elements, which facilitates the adoption of appropriate management decisions.

As a result of studying the problem posed, the following conclusions can be drawn:

The uncertainty of past and future events of a business entity requires a cautious and neutral approach to the formation of elements of financial statements, which is manifested in compliance with the principle of prudence.

The principle of prudence is based on the use of approximations, conditional subjective classifications, summaries and allocations, which, in context with other principles of financial reporting, provide useful and transparent information to different users.

References:

1. Sokolov Ya.V., Bychkova S.M. The principle of prudence (conservatism) in accounting // Accounting. - 2008. - No. 5.

2. Suvorov A.K. Features of accounting principles and main characteristics of financial statements prepared according to IFRS // International accounting. - 2006. - No. 10 (94). - pp. 26-37.

3. Khorin A.N. Principles of formation of financial statements // Accounting. - 2006. - No. 23. P. 50-52.

4. Law of Ukraine “On Accounting and Financial Reporting in Ukraine” dated July 16, 1999 No. 996, as amended and supplemented.

5. Accounting Regulation (Standard) 1 “General Requirements for Financial Reporting”, approved by Order of the Ministry of Finance of Ukraine dated March 31, 1999 No. 87, as amended and supplemented.