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Economic Analysis: Theory and Practice

Analyzing the concept of financial capital in business accounting models and integrated reporting

Vol. 17, Iss. 1, JANUARY 2018

PDF  Article PDF Version

Received: 5 October 2017

Received in revised form: 1 November 2017

Accepted: 15 November 2017

Available online: 29 January 2018


JEL Classification: G12

Pages: 149–165


Plotnikov V.S. Plekhanov Russian University of Economics, Sevastopol Branch, Sevastopol, Russian Federation

ORCID id: not available

Azrakuliev Z.M. Dagestan State Agrarian University named after M.M. Djambulatov, Makhachkala, Republic of Dagestan, Russian Federation

ORCID id: not available

Importance The article analyzes the financial capital concept, which is considered as an asset of the organization (financial asset) rather than liabilities, like capital and reserves.
Objectives The aim is to recognize and classify assets of financial capital and its sources.
Methods The methodology of the study on financial capital value creation draws on the hypothesis that the international integrated reporting standard changes its philosophy and methodology of accounting as an economic science, to substantiate which the normative and positive economics and the economic art of integrated thinking were used.
Results We provide a rationale for classification of financial capital (assets) and sources of its creation, suggest and prove the hypothesis of business accounting and integrated reporting aimed at changing the philosophy of accounting and using for this purpose the integrated thinking to develop new approaches in business accounting methodology within the framework of the financial capital concept.
Conclusions Understanding the content and analyzing the concept of financial capital enabled to introduce goodwill to its structure as a market capitalization of a part of financial investment cost, identify processes of transaction costs capitalization when estimating the value of individual types of capitals of the organization.

Keywords: integrated reporting, business accounting, financial capital concept, capitalization, transaction costs


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