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International Accounting
 

Conceptual framework for consolidated financial statements

Vol. 18, Iss. 39, OCTOBER 2015

Received: 22 January 2016

Accepted: 1 February 2016

Available online: 27 February 2016

Subject Heading: THEORY OF ACCOUNTING

JEL Classification: 

Pages: 2-26

Plotnikov V.S. Sevastopol Branch of Plekhanov Russian University of Economics, Sevastopol, Russian Federation
vcplotnikov@yandex.ru

Plotnikova O.V. Sevastopol Branch of Plekhanov Russian University of Economics, Sevastopol, Russian Federation
vcplotnikov@yandex.ru

Bezhan M.V. Sevastopol Branch of Plekhanov Russian University of Economics, Sevastopol, Russian Federation
mm180883@mail.ru

Mel'nikov V.I. Sevastopol Branch of Plekhanov Russian University of Economics, Sevastopol, Russian Federation
melnikov4-67@mail.ru

Subject The paper attempts to clarify qualitative characteristics of consolidated financial statements and specific methods and techniques of the system of consolidated accounts, which are applied for preparation of consolidated financial statements, based on consideration of the IASB's Conceptual Framework for Preparation and Presentation of Financial Statements.
     Objectives The study aims to clarify qualitative characteristics of the Conceptual Framework, prove the insufficiency of the traditional method of property separation in the balance sheet of the enterprise, and put forward the concept of consolidated accounting and reporting that significantly expands the scope of accounting and captures the performance results of the consolidated group of companies as a whole.
     Methods The methodological substantiation of consolidated financial statements rests on three concepts, i.e. the economic theory of property rights, conceptual framework for financial statements, and the concept of accounting simulation.
     Results The study revised qualitative characteristics of consolidated financial statements, namely, relevance, materiality, fair representation, comparability, verifiability, timeliness, and understandability. It proved the need to separate a special area in the accounting system, i.e. consolidated financial accounts, which provides for consistent generation of consolidated financial statements.
     Conclusions The new and very important area in accounting is the development of the conceptual framework for consolidated financial statements. It enables to specify their qualitative characteristics, define the evolution of modeling in the system of consolidated financial accounting and new tasks in the accounts of new holding structures.

Keywords: conceptual, consolidated financial statements, qualitative, characteristics, simulation

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