Investigation of the existing methodology of value estimation and methods of discount rate estimation
Journal Title: Технологический аудит и резервы производства - Year 2018, Vol 1, Issue 4
Abstract
<p><em>The subject of research is the current practice of determining the fair value of assets and liabilities at the present (discounted) cost. One of the most problematic places is the determination of the discount rate, which belongs to the jurisdiction of a professional accountant judgment.</em></p><p><em>The methods of formalization, hypothetical assumption, system approach and scientific abstraction in substantiating the formation of accounting policy with respect to the choice of the discount rate are used in the research.</em></p><p><em>The results of the study have shown that fair value measurement using discounting can reduce the quality of financial reporting for subjectivity when choosing methods for its valuation and the discount rate. An algorithm is proposed in the choice of methods for fair value estimation, which allows to more reliably determine the real value of accounting objects and elements of financial reporting. Thanks to this, it is possible to simulate the process of calculating the cost of objects, by sequentially identifying an adjustment to the aggregation of value values. Proceeding from the desire to minimize the influence of professional judgments on the financial reporting indicators, the feasibility of determining the future cash flow with the terms of the contract is justified. For the purposes of the following estimates of this asset or liability, it is necessary to calculate the discount rate. Based on the mathematical dependence of the present value of the future cash flow with its nominal value and the discount rate, a formula for calculating the discount rate is proposed. In comparison with similar studies, such discount rate is the actual rate agreed by the parties to the contract, agreeing on the terms and amount of payments. This provides an opportunity to minimize the impact of professional accounting judgments on the reliability level of financial reporting.</em></p>
Authors and Affiliations
Iryna Plikus
Keywords
Related Articles
- EP ID EP527338
- DOI 10.15587/2312-8372.2018.124416
- Views 121
- Downloads 0
Investigation of methods of obtaining whiskers in composite material
<p><em>The object of this research is various methods for obtaining whiskers in composite materials. The method of obtaining whiskers by reduction of metal halides by the example of the basic scheme of this process is in...
Analysis of factors of influence on the development of tourism space of the European Union
<p><em>The object of research is the tourist space of the European Union (EU). One of the most problematic places is the significant territorial diversity of the European tourist space, manifested by a different level of...
Reduction of technological risks in subway and rail transport
<p><em>The aim of research is ensuring the guaranteed safety of passengers traveling on subway trains. The object of the researches carried out by the authors is process of interaction of the subway arriving at high spee...
Optimization of the placement of reactive power sources in the electric grid based on modeling of its ideal modes
<p class="20CxSpFirst"><em>The work is devoted to solving the problem of optimizing the flow of reactive energy in electric grids (EG) of electric supply companies (EC). The object of research is the process of transport...
Development of the method of constructing the graphic model of textile packages by experimental data
<p><em>The object of research is methods for analyzing the geometric parameters of textile packages formatted on machines with separate processes of yarn formation and winding. One of the most problematic places for anal...