Subject Russian regulations on accounting in some cases prescribe using the discounted (present) value for company assets and liabilities valuation, though they provide no definition of the concept. Only a few accounting standards (PBU), prepared by the Russian Ministry of Finance, attempt to comment on the definition and the procedure for present value calculation. Objectives The main purpose of the article is to explore the theory and current practice of the discounting method in accounting and reporting. The objectives are to examine the nature of the concepts of discounting and discounted value, to identify situations when it is required using the present value under Russian accounting regulations (RAS) and International Financial Reporting Standards (IFRS). Methods The research methodology includes analysis, comparison, systematization and compilation of information about relevant accounting standards, guidelines, recommendations of the Ministry of Finance and other departments, international standards, and scientific literature. Results We have tested a unique method of measurement of liabilities on restoration of natural resources in connection with the construction of property, plant and equipment and exploration assets, as well as on elimination and disposal of these objects at the end of their service (residual liabilities) at fair value using discounted cash flows. We recommend appropriate accounting entries; provide an algorithm for recognition of estimated liabilities at discounted (present) value in accounting and reporting. Conclusions and Relevance We conclude that the introduction of discounted cash flows, and, consequently, recording the assets and liabilities at discounted (present) value in financial statements will improve the quality and content of information on events, processes and their possible implications.
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