The analysis of different models of accounting on the basis of capital assets

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The analysis of different models of accounting on the basis of capital assets

The development of modem economic processes leads to the unification and standardization of business operations, financial reporting, process of measurement, collection, compilation, storage and transmission of information about the activities of public and non-public enterprises, institutions and organizations, as a result, makes it possible to classify countries according to variousaccounting models. Since accounting is primarily distinguished from other types of calculation, it demands certain characteristics, in our view, generalization and systematization of evaluation as part of a method of accounting, during which the price in cashwill be decisive in assigning accounting of the country to a certain model of accounting.

The author has taken into consideration how to build new accounting estimates in the current calculating models having studied research works of such scientists as: A. Osipov, Y. Nochovna, V. Istomnyy, S. Hrapach, N. Kuzichkina, D. Hrytsyshena,E. Geyer and K. Noubs. In their scientific achievements different accounting models have been systematized and economic, political and social characteristics of each model have been given.

To study characteristics of evaluation principles in different models of accounting; justification for further scientific study of evaluation as a method of accounting; synthesis of evaluation methods in different models of accounting; to study the Ukrainian model of accounting based on the method of evaluation in details.

To achieve this goal, we used methods of comparison, analysis, deduction, systematization while considering the evaluation of properties in different models of accounting.

One of the main disputable and controversial in the management accounting is ambiguity of approaches to the understanding of the principle in accounting estimates. There is still unresolved question of classification in the model of accounting inUkraineon the basis of the economic category of "evaluation". The wide variation in worthinesss leads to a significant number of methods for assessing non-financial calculations and, consequently, referring to the various sub-objects valuation, misstatementsin the financial operations, thus the information provides substantial differences from the real balance in sheet worthiness characteristics. All this motivates to further study of the economic category of evaluation, including various models of accounting.

Y. Nochovna and V. Kutsenko considering the historical development of accounting models as a separate phenomenon, connect it with the beginning of the twentieth century, influenced by the following factors: the degree of state influence on the organization of accounting in the enterprise; direction on the informational needs of users of certain information, who are the major suppliers of the capital in the country; the priority of macro- or micro-state interests; geopolitical situation of the country [1, p.2],

A. Osipov stresses that the evaluation of different models of accounting is influenced by such factors as regulation, financial and tax systems, the general economic situation in the country, the affect of other countries and other situations. In his point of view, generally accepted qualitative characteristics, defined in different conceptual bases are: materiality (significance), reliability, consistency, timeliness. According to his research of model of accounting, the differences in term of evaluation as a method of accounting are:

1. The value adjustment of assets is allowed in such countries as Australia, Hong Kong, India, the UK; is allowed under certain circumstances in France and Italy. It is forbidden in Sweden,Canada, Germany, Japanand the USA.

2. Making value adjustment it is necessary to take into account the inflation in the country. It is important to adjust these models in Argentina, Brazil, Israel, Mexico; it is possible to doit in some cases in theUK, Australia, theNetherlands, the United States. It isn't required inCanada, Indonesia, Japan, Germany and Korea.

3. While liquidation the intangible assets it is written off at the expense of own capital in such countries asltaly, Singapore, South Africa,the UK. The cost is written off in the statement of income and expenses inAustralia, Canada, France andtheUSA [2, s.51-60].

The dependence of this difference is the discrapincy in legal systems, the state's role in the capital markets and other markets, traditions and culture of each country, and is explained by the fact that in each country the choice of accounting rules is regulated differently.

K.Noubs considers the necessity of strong following the principle of cost estimates using the initial evaluation and doing the evaluation of replacement cost (current worthiness) to the classification criteria of model of accounting [3].V. Istomnyy notes that there are not even two countries with the same accounting system. The assignment of one or the other country to a certain classification group is rather conditional. It is necessary to discern not only the similarities but also some differences in accounting practice. To reflect each operation correctly an accountant of each country solves a number of problems, including: the valuation of any operation - problem quantification or evaluation [4, s.1-52].

Though there is no the one thought concerning the classification of model of accounting, in the author's point of view, the definition of evaluation should be considered in such classification models of accounting as: Anglo - American, Continental, Latin American and Islamic.

Anglo-American model of accounting is supposed to be the most liberal, since it contains alternatives of evaluations.

The Anglo-American model of accounting evaluation of capital assets consists of purchase prices or the costs, which include costs for purchasing, transportation and procurement costs, the costs associated with the introduction to the application. The evaluation of assets produced independently is carried out by calculating its cost. Interest payments associated with the acquisition of the asset are also included in the cost. During the exchange such options as: evaluations to the market worthiness, expertise, accounting for residual worthiness are used.

Alternative methods of theevaluation of assets in the Anglo-American model is the using of accounting estimates according to the current market worthiness on the date of the last value adjustment. The frequency of value adjustments is determined by just the organization.

The basis of accounting in Anglo-American model is based on the principle of asset evaluation by self-cost or byPrimary cost.

The continental model of accounting evaluation of assets suggests posting carried calculations at the cost of buying (initial worthiness) in the case of purchase by money using the additional costs for the delivery and installation.

Making asset the self evaluation is exercised at the production of cost for facilities constructed on their own, based on the cost of raw materials and overhead costs related to production (usually the worthiness of capital assets does not include financing costs and general administrative costs and expenses for research and development). Proportions may be included in the cost, unless they are directly related to the creation of an asset (and only during its production). The expences connected with production capacity are excluded.

Receiving royalty-free asset evaluation is carried according to the market worthiness.

One of the rules, which is set by law, is the immutability of the methods of evaluation and the cancellation during the reporting periods. This immutability has to provide a single methodology for calculating indices in different forms of accounting for the same date, their mutual coordination and continuity of these financial statements in different years.

The basis of accounting continental model is based on the principle of asset evaluation at cost or at original cost.

Evaluation as a method of accounting in the Latin American model of accounting is very similar to the Anglo-American model of accounting. Like in the Anglo-American model of accounting, evaluation of capital assets is carried at original cost. The evaluation of assets is carried at cost in the manufacture of the asset themselves. During an exchange the real worthiness is applied that can be represented as: evaluation by market worthiness, expert evaluation, evaluation according to residual worthiness or calculating worthiness.

Adjustments to the original cost of assets, the accumulated depreciation is taken place using a coefficient of devaluation of national currency, which is established by the government in a form ofValue adjustment.

The basis of Latin American model of accounting is set on the principle of asset evaluation by the fair value or by the revaluated initial worthiness.

Analyzing the features of the system in Islamic model of accounting shown in the works by S. Hrapach, N. Kuzichkinoyi and D.O. Hrytsyshena, one can get the output that the Islamic model prefers thee valuation of assets and liabilities of the company at market worthiness but not at a historical cost [5 s.1-2; 6, s.32-40].

The basis of Islamic model of accounting is set on the principle of the asset evaluation at market worthiness or fair value.

Approaches to evaluation in the modem accounting models of the world is given in table 1.

Table 1. The analysis of approaches to evaluation in the modem accounting models of the world

E.S. Geyer stresses the fact that the Ukrainian model of accountingmoves to the continental model of accounting [7, s.1-4].

According to the Law of Ukraine "On Accounting and Financial Reporting in Ukraine" in Ukrainian model of accounting one can notice the principle of asset valuation at historical cost [8], which is confirmed by the thesis of E. Geyer about the moving of Ukrainian model of accounting to the continental model.

The author supposes that this idea needs confirmation on the basis of approaches to the evaluation of capital assets in the Ukrainian model of accounting using different accounting standards, which are shown in table 2.

Table 2. The analysis of approaches to the evaluation of capital assets in the Ukrainian model of accounting using different accounting standards (Source: it is systematized by the author on the base of [9; 10; 11, 12])

Comparing evaluations which are used on initial recognition of the assets in Ukrainian model of accounting and other contemporary models of the accounting world, we concluded that the Ukrainian model of accounting has features that are characteristics of the mixed model. Since the implementation of the evaluation by different accounting standards for the same object of evaluation, but in different ways receipt (with different origin), the evaluation will be carried out using different methods.

Having analyzed the Ukrainian model of accounting on the basis of methods for assessing of fixed means on different stages of the life cycle of the asset, we would like to emphasize that the movement of the Ukrainian model of accounting to the continental one should be done in two stages. The first phase - the adoption of the Latin American model, as economic indicators are not sufficiently stable and leveling of the inflation in the country is put on the performance balance. The second phase - implementation of the continental model of accounting, which must be accompanied by a stabilization of economic indicators and constant direction of the economy to the growth in real GDP and a positive economic balance.

Conclusions and prospects for further development. Summing up the research, it should be noted that at the present stage the evaluation is an integral part of accounting and many scientists link its development with specific business transactions. In modern model of accounting the estimate is closely associated with different types of costs, which in turn are different in certain business transactions. The necessity of further scientific study of the evaluation as a method of accounting and evaluation methods are summarized in various models of accounting. It is confirmed that Ukrainian model of accounting is directed to the continental model of accounting in the case of the evaluation methods are non- financial assets. It is also confirmed that the accounting system tends to unify global model. Theunify global accounting model can be a model that is based on international accounting standards. International accounting standards and their wide variation in business transactions with certain methods of evaluation are prospective for future research.

References

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