THE IMPACT OF EVENTS AFTER THE REPORTING DATE ON THE FINANCIAL POSITION AND PERFORMANCE OF BANKS
Banks maintain their accounting records and prepare financial statements in accordance with IFRS. Annual financial statements are a set of reports that characterize the financial position, results of the bank’s operations, cash flows and changes in equity for the year. It is interesting to note th...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Universytet imeni Alfreda Nobelya
2024-01-01
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| Series: | Akademičnij Oglâd |
| Subjects: | |
| Online Access: | https://acadrev.duan.edu.ua/images/PDF/2024/1/7.pdf |
| _version_ | 1827396935732953088 |
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| author | Oksana O. Kazak Mariana O. Sulyma |
| author_facet | Oksana O. Kazak Mariana O. Sulyma |
| author_sort | Oksana O. Kazak |
| collection | DOAJ |
| description | Banks maintain their accounting records and prepare financial statements in accordance with
IFRS. Annual financial statements are a set of reports that characterize the financial position, results
of the bank’s operations, cash flows and changes in equity for the year. It is interesting to note that the
end of the reporting period is only the beginning of the stage of preparation and disclosure of financial
statements. After all, in addition to the reporting date and the date of disclosure of the annual financial
statements, which are known to the general public, there is a whole list of dates that are known only
to managers, accountants and auditors. These are the date of completion of preparation, the date of
submission to the Board of Directors, the date of partial disclosure of certain indicators, such as profit,
the date of approval of the financial statements by shareholders, etc.
As a rule, the reporting date is December 31 of the respective year, although it may be different in
accordance with IFRS. Accordingly, the date of publication of the annual financial statements is April
30 of the year following the reporting year. At the same time, a certain period of time elapses between
the reporting date and the date of approval of the financial statements. The Bank’s operations are
ongoing, and therefore, there is a high probability that new events and circumstances may arise. IFRSs
recommend disclosing information about events that occur between the reporting date and the date the
financial statements are authorized for issue or the date the financial results or selective information
is available. Such recommendations should not be ignored, as this may indicate the concealment of
important information or even be classified as fraud.
Events after the reporting period are any events, which may be positive or negative, favorable or
unfavorable, that occur from the end of the reporting period until the financial statements are authorized vfor issue. The classification of these events depends on the date of their probable occurrence and,
accordingly, their impact on the financial statements. In general, these are events that affect the financial
statements and require adjustments or events that do not require adjustments.
It is worth paying attention to events after the reporting period that may affect the going concern
basis. IFRS prohibit banks from preparing financial statements on a going concern basis if events after
the reporting period indicate that such an assumption is inappropriate.
The decision to use the going concern basis is based on a checklist of going concern triggers and
their detailed analysis. The checklist of triggers includes: economic and geopolitical situation; level of
income and cash flows of the bank; liquidity and solvency of the bank, as well as current and future
profitability; financial position of counterparties; external and internal factors affecting the work of
employees.
For the financial statements prepared for the year ending December 31, 2021, the war and its
consequences are events that do not require adjustment, as they reflect conditions that arose after the
reporting period. For example, the company’s assets were damaged as a result of hostilities between
the end of the reporting period and the authorization of the financial statements for issue. In accordance
with IFRS, any impairment losses will be recognized in the period in which they occur. Accordingly,
information on significant losses from asset damage will not adjust the 2021 financial data, but should
be disclosed in the notes to the financial statements. The study analyzed the notes to the annual financial
statements of banks for 2019-2022. |
| first_indexed | 2024-03-08T18:59:55Z |
| format | Article |
| id | doaj.art-7ba6fe7490824880bd831e913989c68c |
| institution | Directory Open Access Journal |
| issn | 2074-5354 2522-9745 |
| language | English |
| last_indexed | 2024-03-08T18:59:55Z |
| publishDate | 2024-01-01 |
| publisher | Universytet imeni Alfreda Nobelya |
| record_format | Article |
| series | Akademičnij Oglâd |
| spelling | doaj.art-7ba6fe7490824880bd831e913989c68c2023-12-28T05:57:29ZengUniversytet imeni Alfreda NobelyaAkademičnij Oglâd2074-53542522-97452024-01-01160809210.32342/2074-5354-2024-1-60-6THE IMPACT OF EVENTS AFTER THE REPORTING DATE ON THE FINANCIAL POSITION AND PERFORMANCE OF BANKSOksana O. Kazak0Mariana O. Sulyma1Borys Grinchenko Kyiv UniversityBorys Grinchenko Kyiv UniversityBanks maintain their accounting records and prepare financial statements in accordance with IFRS. Annual financial statements are a set of reports that characterize the financial position, results of the bank’s operations, cash flows and changes in equity for the year. It is interesting to note that the end of the reporting period is only the beginning of the stage of preparation and disclosure of financial statements. After all, in addition to the reporting date and the date of disclosure of the annual financial statements, which are known to the general public, there is a whole list of dates that are known only to managers, accountants and auditors. These are the date of completion of preparation, the date of submission to the Board of Directors, the date of partial disclosure of certain indicators, such as profit, the date of approval of the financial statements by shareholders, etc. As a rule, the reporting date is December 31 of the respective year, although it may be different in accordance with IFRS. Accordingly, the date of publication of the annual financial statements is April 30 of the year following the reporting year. At the same time, a certain period of time elapses between the reporting date and the date of approval of the financial statements. The Bank’s operations are ongoing, and therefore, there is a high probability that new events and circumstances may arise. IFRSs recommend disclosing information about events that occur between the reporting date and the date the financial statements are authorized for issue or the date the financial results or selective information is available. Such recommendations should not be ignored, as this may indicate the concealment of important information or even be classified as fraud. Events after the reporting period are any events, which may be positive or negative, favorable or unfavorable, that occur from the end of the reporting period until the financial statements are authorized vfor issue. The classification of these events depends on the date of their probable occurrence and, accordingly, their impact on the financial statements. In general, these are events that affect the financial statements and require adjustments or events that do not require adjustments. It is worth paying attention to events after the reporting period that may affect the going concern basis. IFRS prohibit banks from preparing financial statements on a going concern basis if events after the reporting period indicate that such an assumption is inappropriate. The decision to use the going concern basis is based on a checklist of going concern triggers and their detailed analysis. The checklist of triggers includes: economic and geopolitical situation; level of income and cash flows of the bank; liquidity and solvency of the bank, as well as current and future profitability; financial position of counterparties; external and internal factors affecting the work of employees. For the financial statements prepared for the year ending December 31, 2021, the war and its consequences are events that do not require adjustment, as they reflect conditions that arose after the reporting period. For example, the company’s assets were damaged as a result of hostilities between the end of the reporting period and the authorization of the financial statements for issue. In accordance with IFRS, any impairment losses will be recognized in the period in which they occur. Accordingly, information on significant losses from asset damage will not adjust the 2021 financial data, but should be disclosed in the notes to the financial statements. The study analyzed the notes to the annual financial statements of banks for 2019-2022.https://acadrev.duan.edu.ua/images/PDF/2024/1/7.pdfanalysisauditbanksaccountingevents after the reporting datefinancial positionprofitlossfinancial statementsnotesias |
| spellingShingle | Oksana O. Kazak Mariana O. Sulyma THE IMPACT OF EVENTS AFTER THE REPORTING DATE ON THE FINANCIAL POSITION AND PERFORMANCE OF BANKS Akademičnij Oglâd analysis audit banks accounting events after the reporting date financial position profit loss financial statements notes ias |
| title | THE IMPACT OF EVENTS AFTER THE REPORTING DATE ON THE FINANCIAL POSITION AND PERFORMANCE OF BANKS |
| title_full | THE IMPACT OF EVENTS AFTER THE REPORTING DATE ON THE FINANCIAL POSITION AND PERFORMANCE OF BANKS |
| title_fullStr | THE IMPACT OF EVENTS AFTER THE REPORTING DATE ON THE FINANCIAL POSITION AND PERFORMANCE OF BANKS |
| title_full_unstemmed | THE IMPACT OF EVENTS AFTER THE REPORTING DATE ON THE FINANCIAL POSITION AND PERFORMANCE OF BANKS |
| title_short | THE IMPACT OF EVENTS AFTER THE REPORTING DATE ON THE FINANCIAL POSITION AND PERFORMANCE OF BANKS |
| title_sort | impact of events after the reporting date on the financial position and performance of banks |
| topic | analysis audit banks accounting events after the reporting date financial position profit loss financial statements notes ias |
| url | https://acadrev.duan.edu.ua/images/PDF/2024/1/7.pdf |
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