Accounting for uncertainty assets

Nashkerska Halyna
PHD in Economics, Associate Professor of the Department of Accounting and Auditing, Ivan Franko National University of Lviv, Lviv, E-mail: halyna.nashkerska@lnu.edu.ua, ORCID ID: https://orcid.org/0000-0003-0461-2920

Cite this article:

Nashkerska H. (2022) Accounting for uncertainty assets. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Oblik nevyznachenosti aktyviv; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 9-10 (298-299), pp. 43-49.

Abstract

The purpose of the article is research the fundamental uncertainty in accounting. The main research methods were general scientific approaches to determining the essence, methods of deduction and induction, comparison, generalization. The Framework identifies existence uncertainty, outcome uncertainty and measurement uncertainty. With respect to recognition, revised in March 2018 the Framework identifies both existence uncertainty, defined simply as uncertainty about whether an asset and outcome uncertainty, defined as uncertainty about the amount or timing of any inflow benefits that will ultimately result from an asset. With respect to measurement, meanwhile, the Framework defines measurement uncertainty as uncertainty that arises when monetary amounts in financial reports cannot be observed directly and must instead be estimated. A connection between these components has been established, they can be combined and we proposed the term fundamental uncertainty for this combined concept. Installed that the removal of the requirement for probable future inflows or outflows of economic benefits could require recognition of various assets that are not recognized under current Ukrainian accounting standards. This expands the recognition of intangible assets created by the enterprise, operating lease assets and derivative financial instruments (regardless of the expectation of benefits). Groups of transactions with assets, when displaying which there is a high probability of outcome uncertainty an established. This includes use by appointment in activity, probability and price of sale, changes in value as of the balance sheet date, terms of receipt of funds, results of expenditure of funds. Measurement uncertainty arises when a measure for an asset the range of possible outcomes is extremely wide. In such cases, the most relevant information for users of financial statements may relate to the range of outcomes and the factors affecting their likelihoods. Assessments must say what sources of uncertainty have been identified and characterize their overall impact on the assessment conclusion. To do this, we recommend carrying out an uncertainty analysis. Uncertainty analysis is the process of identifying and characterizing uncertainty about questions of interest and/or quantities of interest in a assessment. The result of such an analysis should be the reduction of measurement uncertainty and selection of the best value from the available range of estimates. Reducing uncertainty in accounting increases usefulness and faithfully represent information in financial statements.

Keywords

accounting, existence uncertainty, outcome uncertainty, measurement uncertainty, fundamental uncertainty.

JEL classification: M410; DOI: 10.32680/2409-9260-2022-9-10-298-299-43-49

UD classification: 657.1.012.1

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