In times of uncertainty, consideration of the content of uncertainty and its measurement when preparing financial statements under IFRS is extremely relevant. Management’s judgment should be based on the types of uncertainty listed in the Conceptual Framework for Financial Reporting revised by the International Accounting Standards Board in March 2018: uncertainty of existence, uncertainty of outcome and uncertainty of measurement. This classification of uncertainty meets the needs of investors, as researched by the FRC LAB (2022) and should be disclose appropriately. An analysis of IFRS requirements for disclosure of uncertainty in financial reporting as a whole and regarding the appropriateness of applying the going concern principle was carried out. The IFRS requirements for disclosure of going concern are compared, taking into account the latest documents of the IAS Board and US GAAP. The Russian-Ukrainian war is a geopolitical risk according to the classification of the World Economic Forum. The implications of Russia’s invasion of Ukraine on financial reports which must be taken into account by management during the assessment of business continuity. The application of IFRS requirements regarding business continuity is considered on the example of financial statements for 2022 prepared by energy companies of Ukraine.The conclusion about the appropriateness of the use of going concern and the required level of disclosure depend on the facts and circumstances of each specific case. Ukrainian enterprises should necessarily provide a note on the going concern, not limited to stating the fact of preparing financial statements based on this assumption. Enterprise management shoulddetermine whether its plans can mitigate conditions and events that cause material uncertainty and cast significant doubt on the ability to continue business activity as a going concern.
Author Biography
Svitlana Zubilevych, National University of Water and Environmental Engineering, Rivne
