REGULATORY PROVISION OF ACCOUNTING FOR THE PRODUCTION OF FINISHED PRODUCTS IN WOODWORKING INDUSTRY ENTERPRISES

Abstract

The woodworking industry is a vital part of Ukraine’s economy, generating foreign exchange, employment, and opportunities for deep raw material processing. In today’s market economy, the sector faces the need to improve production management, reduce costs, and enhance inventory, raw material, and finished goods accounting. However, the existing regulatory framework often remains outdated, fragmented, and insufficiently aligned with the technological specifics of the industry. With Ukraine’s gradual integration into the European economic space and the implementation of international financial reporting standards (IFRS), the need to modernize the regulatory framework becomes even more pressing. Amid the challenges of war, economic instability, and enterprise relocation, there is a growing demand for a flexible, transparent accounting system based on clearly defined normative principles. This article analyzes the current regulatory framework for accounting of finished goods in Ukrainian woodworking enterprises. It reveals gaps in national accounting standards, particularly their limited ability to reflect complex technological processes. Special attention is given to the classification and accounting of main, by-products, and joint (accompanying) products. Drawing on Ukrainian academic research, the article summarizes key definitions and interpretations related to by-products and accompanying products. Depending on technological and organizational factors, outputs like wood chips, sawdust, and offcuts may be classified differently—as finished goods, raw materials, fuel, or waste. Enterprises must clearly define and document accounting policies for such outputs. The article reviews relevant Ukrainian Accounting Standards (NP(S)BO) and compares them with IAS 2 “Inventories,” emphasizing the need for gradual harmonization. As a result, the research concludes that improving the regulatory framework for the accounting of finished goods in the woodworking sector is crucial for optimizing production, reducing material losses, and increasing financial sustainability. Clear differentiation between main, by-products, and accompanying products enhances cost accounting accuracy, supports inventory management, and strengthens the analytical capacity of accounting data. These improvements are essential for sustaining the competitiveness of woodworking enterprises and ensuring their stable operation in the face of ongoing external challenges.