CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

Abstract

The article examines the essence and functions of the accounting policy for the organization and methods of accounting at the enterprise. A study of the role of accounting policy in the formation of information support of the enterprise management system and the tasks assigned to it was carried out. It is noted that the accounting policy should ensure full reflection in the financial statements of assets, liabilities, equity, all facts of economic life, based on their economic essence, and not only their legal form. Therefore, monitoring the validity, relevance and effectiveness of accounting policy elements is a guarantee of the quality of the company's reporting indicators. The author presents the grouping of accounting policy elements according to their influence on the financial results and financial condition of the enterprise with the aim of focusing attention on the most influential of them. The dynamic modern world of business permanently creates conditions that require revision or changes to the accounting policy. The article considers the cases that lead to changes in the accounting policy and changes in accounting estimates, as well as the practical necessity of reflecting changes in elements in the order on the accounting policy of the enterprise is established. The peculiarities of making changes to the accounting policy in a prospective and retrospective way are revealed. The application of the retrospective approach makes it necessary to recalculate all past transactions and events as if they were reflected in accounting and financial statements from the very beginning in accordance with the new accounting policy. The impact of the change in accounting policy on the events and operations of past periods is reflected by adjusting the balance of retained earnings at the beginning of the reporting year. If the amount of adjustment of retained earnings at the beginning of the reporting year cannot be reliably determined, then the accounting policy for such events and operations will be applied prospectively without adjustments and changes in past periods. The change in accounting estimates is applied only prospectively, without making corrections to last year's reporting by including the result of the change in accounting estimates in the Statement of Financial Results in the period when the change took place.