The impact of changes in the business environment and normative basis of financial reporting on the presented power of measure of financial performance of the company
Journal Title: Acta Economica - Year 2016, Vol 14, Issue 24
Abstract
Until today despite the many changes that have occurred, particularly in the last two decades, in the business environment and operations of companies, more than a century old ratio analysis proved to be a simple and quick way of identifying the quality of their financial position and successfulness. The beginning of the application of „mixed” basis of financial reporting brought change in the content of results and in the equity due to the application of the fair value. The circumstances in which the result includes unrealized gains whose realization can be expected in a relatively short time, turned a realized gain out of the concept of historical cost into the result that the company would achieve if, until the sale of financial assets that are measured at fair value per result, there would not be any changes in their fair value. As such expectations are unrealistic it is useful to determine the share of unrealized gains/losses in the result. There is also a similar but stronger need when it comes to the equity, which includes unrealized gains whose realization will occur in a longer period, so there is higher probability that changes in the fair value of assets and liabilities which are measured at fair value per other total result will happen. Because of this measures of financial performance, which are determined on the basis of the stated parameters, can have different values and interpretations. The need to adapt the performance measures to the needs of investors and creditors imposed the requirements for establishing new ones and using non-financial performance measures together with the selected measures of financial performance.
Authors and Affiliations
Ката Шкарић Јовановић
Keywords
Related Articles
- EP ID EP43823
- DOI https://doi.org/10.7251/ACE1624031S
- Views 273
- Downloads 0
Possibilities of further emerging bond market development
Since developed bond market is very important, it is indisputable that large force need to be directed to it’s further development in developing countries. In order to bond market be developed numerous barriers of develo...
PUBLIC‐PRIVATE PARTNERSHIPS AS FUNCTION TO OVERCOME CURRENT FINANCIAL‐ECONOMIC CRISIS
Contemporary globalization trends and processes of regional connecting national trades, and particularly more successful implementation of integration into the European union, impliy the need for huge investments into in...
Imperative of International Business and Management
Успешно међународно пословање се најчешће везује за компаније из земаља Тријаде. И поред тога, процес интернационализације и глобализације није могуће зауставити националним границама. Земље у развоју, као и неразвијене...
ETHICAL RESPONSIBILITY OF MANAGERS IN THE GLOBAL ECONOMIC CRISIS
Reconstruction of companies are imminent processes which Serbian managers use in the fight for achieving greater efficiency and competitiveness in the global economic crisis which has affected our organizations. However,...
INFLUENCE OF THE GLOBAL FINANCIAL CRISIS ON BOSNIA AND HERZEGOVINA WITH FOCUS ON THE BANKING SYSTEM
Goal of each responsible government is achieving of the financial stability as the basic precondition for the creation of the favorable environment for the development of the economy real sector. Global financial crisis...