The concept of financial statements of an enterprise is considered both in the Law
of Ukraine "On Accounting and Financial Reporting in Ukraine" and in the National
Accounting State (Standard) 1 "General Requirements to Financial Statements",
according to which financial statements are statements containing information about
financial condition and results of the enterprise activity [5]. However, in contrast to
national law, in accordance with IAS 1 Presentation of Financial Statements, financial
statements are those intended to meet the needs of users who cannot require an entity
to report in accordance with their information needs [6] . The above explanations
provide grounds for arguing that it is advisable to harmonize the definition of data in
national legislation with the definition in international standards to avoid
misunderstandings. Therefore, in our view, taking into account the current trends of
improving the accounting system and bringing it closer to the EU regulations, the
following definition of financial statements can be formulated, namely: financial
reporting is an integral system of general indicators of financial and economic activity
of an enterprise that should to meet the information needs of potential users in order to
make effective managerial decisions.
The Law of Ukraine "On Accounting and Financial Reporting in Ukraine" defines
the purpose of financial reporting, identifies three main characteristics on which it
should be formed: completeness, truthfulness and impartiality [7]. In turn, IAS 1, the
main general characteristics of financial statements, determines: reliability; compliance
with IFRS; continuity; compilation of accounts based on the principle of accrual;
allocation of essential articles in separate classes; the prohibition of curtailment of
income and expenses or of assets and liabilities; periodicity; the possibility of
comparing information regarding the previous period [6].
The main purpose of financial reporting is to provide users with complete, truthful
and unbiased information about the financial position and performance of the company
in making decisions. Currently in Ukraine, the financial statements of the company
consist of:
1) Balance (Statement of financial position);
2) Financial Results (Consolidated Income Statement);
3) Cash Flow Statement;
4) Statement of equity;
5) Notes to the financial statements [5].
The annual financial statements of enterprises in the EU Member States consist
of a balance sheet, a profit and loss account and notes to the financial statements. At
the same time, they may allow or require the inclusion of other reports in the annual
financial statements, disclosure of other information [8, p. 24]. In particular, Directive
2013/34/EU has made it compulsory to compile a Management Report for all
categories of enterprises, and stakeholders of public interest in this report should also
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