Browsing by Author "Kvatashidze, Nadejda"
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Item Issues of accounting for the impairment of financial instruments(Ivane Javakhishvili Tbilisi State University Press, 2019) Kvatashidze, Nadejda; Sabauri, LevanUsers of financial reporting information are interested in whether there is a risk of impairment of financial instruments – the likelihood of emerging a loss due to non-compliance with contractual obligations. To provide the users with a fair information on the financial instrument, IAS 9 „Financial Instruments” requires their testing on impairment . A purpose of impairment-related requirements is to recognize the expected credit loss for all financial instruments in the financial statements. IAS 9 requires to measure an impairment of the financial instruments by the Expected Credit Loss (ECL) model – to recognize the financial assets by amount of the ECL. A purpose of this model is to provide users of financial reporting information with the relevant information on the volume, timing and future uncertainties of a reporting entity. Therefore, under this model, a company should not postpone the recognition of credit losses until there is objective evidence of impairment. Rather, this model requires the recognition of credit losses throughout the existence of a financial asset and the updating of expected losses at each reporting date in order to provide timely a relevant information to stakeholders.Item Reflection of provisions in financial reporting(Ivane Javakhishvili Tbilisi State University Press, 2021) Kvatashidze, NadejdaThe paper deals with essence, purpose, valuation and reflection of provisions in the financial reporting. Provisions are the funds envisaged for preventing negative impact of various circumstances on the financial results. Financially, the creation of provisions is reflected in the recognition of expected losses. Under the conceptual framework for financial reporting, the provisions in the financial statements are reflected according to the concepts of financial capital maintenance, prudence, and impairment of equity. Keeping In mind these requirements, the relevant provisions are reflected in all sections of the financial reporting. The provisions related to assets and liabilities are an estimated value, the calculation of which requires professional judgment and development of appropriate accounting policies, which ultimately determines reliability of the information. As a result, users of the financial reporting-related information are provided with a realistic information, which in turn helps them to make accurate forecasts and decisions. Purpose of the provisions related to assets and liabilities is to adjust their carrying amount by forecasting the uncertainties and the expected risks and making professional assessments. The reflection of provisions in the financial reporting ensures that the information is realistic - the assets are not overvalued, while the liabilities are not undervalued.