ACCOUNTING POLICY AS A TOOL FOR IMPLEMENTING THE GOING CONCERN ASSUMPTION: A STAGE-BASED TRANSFORMATION MODEL

Abstract

The article is devoted to the study of the transformation of an enterprise’s accounting policy under conditions of increasing insolvency risk and the threat of bankruptcy. The relevance of the research is determined by the growing economic instability, which significantly increases uncertainty regarding the continuity of business operations and requires more flexible and informative accounting solutions. It is substantiated that the traditional interpretation of accounting policy as a stable and formalized set of accounting methods and procedures does not meet the needs of anti-crisis management and does not ensure an adequate reflection of financial risks in financial reporting. Based on a systematic analysis of scientific approaches to accounting policy, the going concern principle, and insolvency diagnostics, the article identifies the fragmentation of existing research, in which accounting policy, bankruptcy procedures, and financial distress assessment are usually considered separately. Particular attention is paid to the role of professional judgment, accounting estimates, impairment of assets, provisioning, materiality thresholds, and classification of assets and liabilities in conditions of financial instability. It is proved that these elements of accounting policy significantly influence the quality of financial reporting and the reliability of information used for managerial, investment, and control decisions. The study substantiates the necessity of adapting accounting policy depending on the stage of financial crisis and the level of insolvency risk. In this context, accounting policy is proposed to be considered not only as a regulatory document ensuring compliance with accounting standards, but also as a dynamic instrument for forming an information model of either solvency recovery or enterprise bankruptcy. Such an approach allows accounting policy to serve as an effective tool for supporting anti-crisis management, improving transparency of financial reporting, and ensuring timely identification of threats to business continuity. The results of the research create a theoretical basis for further development of adaptive accounting policies and their audit assessment in conditions of financial uncertainty and financial distress. The proposed approach expands the scientific understanding of the role of accounting policy in insolvency-related processes and may be used in both academic research and practical activities of enterprises operating under heightened financial risk.