Subject. We address the determination and use of discounted value in the preparation of financial statements under IFRS and problems associated with this estimate, including in circumstances of pandemics. Objectives. We focus on a comprehensive study of the purpose, reasons, methods of calculating and applying the discounted value in the process of preparing the financial statements, and consider factors that affect the estimate and its changes, as well as its impact on the indicators of financial statements. Methods. The study employs methods of logical, statistical, comparative, and linguistic analysis. We also review foreign and Russian scientific and practical literature, the rules contained in the Conceptual Framework for Financial Reporting, consolidated financial statements of Russian public companies for 2019 and 2020. Results. We unveil problems associated with the use of discounted value and the area of its influence, make proposals to improve its measurement and disclosure in the preparation of financial statements. The scope of application of the results obtained includes: building up regular reporting by economic entities, primarily in terms of determining the discounted value, including in the direction of coordinating financial and non-financial reporting information and improving the reliability of disclosures and their analytic function. Conclusions. To improve the reliability of financial statements, it is crucial to expand disclosures about approaches and assumptions used in measuring the discounted value and coordinate information about the elements of discounted value with non-financial reporting data.
Alekseev D.A., Sorokina T.V. [The meaning of discounting procedure]. Izvestiya Baikal'skogo gosudarstvennogo universiteta = Bulletin of Baikal State University, 2016, vol. 26, no. 6, pp. 972–979. URL: Link (In Russ.)
Kamnev I.M. [Conceptual approaches to justification of a rate of discounting]. Finansovaya analitika: problemy i resheniya = Financial Analytics: Science and Experience, 2012, no. 20, pp. 8–15. URL: Link (In Russ.)
Sumina E.E. [Problems of discount rate calculation in the domestic financial accounting]. Rossiiskoe predprinimatel'stvo = Russian Journal of Entrepreneurship, 2015, vol. 16, no. 20, pp. 3461–3466. URL: Link (In Russ.)
Myskin A.A. [Problems of Western discount rate calculation models application in the process of Russian companies business valuation]. Putevoditel' predprinimatelya = Entrepreneur’s Guide, 2020, vol. 13, no. 3, pp. 69–78. (In Russ.) URL: Link
Freeman M.C. The practice of estimating the term structure of discount rates. Global Finance Journal, 2009, vol. 19, iss. 3, pp. 219–234. URL: Link
Easton P. Security returns and the value relevance of accounting data. Accounting Horizons, 1999, vol. 13, iss. 4, pp. 399–412. URL: Link
Brealey R.A., Myers S.C., Allen F. Principles of Corporate Finance. McGraw-Hill Education, 2013, 976 p.
Damodaran A. Investment Valuation: Tools and Techniques for Determining the Value of any Asset. New York, John Wiley & Sons, 2012, 992 p.
Damodaran A. Security Analysis for Investment and Corporate Finance, 2nd Edition. NY, John Wiley & Sons, 2006, 704 p.
Massari M., Gianfrate G., Zanetti L. Corporate Valuation: Measuring the Value of Companies in Turbulent Times. NY, John Wiley & Sons, 2016, 512 p.
Fama E.F., French K.R. Common Risk Factors in the Returns on Stock and Bonds. Journal of Financial Economics, 1993, vol. 33, iss. 1, pp. 3–56. URL: Link90023-5
Fama E.F., French K.R. The Value Premium and the CAPM. The Journal of Finance, 2006, vol. 61, iss. 5, pp. 2163–2185. URL: Link
Kuchko A.Yu., Naumova O.A. [Different methods of calculating discount rate as a way of manipulating the company's fair value estimates]. Vestnik Voronezhskogo gosudarstvennogo universiteta. Ser.: Ekonomika i upravlenie = Proceedings of Voronezh State University. Series: Economics and Management, 2019, no. 4, pp. 171–178. URL: Link (In Russ.)
Fahad N., Scott T., Ma N. The consequences of discount rate selection for defined benefit liabilities. Journal of Contemporary Accounting & Economics, 2020, vol. 16, iss. 1. URL: Link
Goldsmith K., Lee A.Y. Flash COVID-19 Research Issue: Insights on COVID-19 Outbreak and Related Topics. Journal of the Association for Consumer Research, 2020, vol. 6, iss. 1. URL: Link
Grossi G., Ho A., Joyce P.G. Budgetary responses to a global pandemic: International experiences and lessons for a sustainable future. Journal of Public Budgeting, Accounting & Financial Management, 2020, vol. 32, iss. 5, pp. 737–744. URL: Link
Shvyreva O.I., Kruglyak Z.I., Petukh A.V. [Particularities of the independent auditor's report on reliability of accounting (financial) statements for 2019: COVID-19 as qualitatively essential information (Part 1)]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2020, vol. 23, iss. 6, pp. 701–722. (In Russ.) URL: Link
Hope O.K., Wang J. Management deception, big-bath accounting, and information asymmetry: Evidence from linguistic analysis. Accounting, Organizations and Society, 2018, vol. 70, pp. 33–51. URL: Link
