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International Accounting
 

Harmonization of financial and tax accounting for banking operations

Vol. 20, Iss. 15, AUGUST 2017

PDF  Article PDF Version

Received: 28 September 2016

Received in revised form: 11 October 2016

Accepted: 25 October 2016

Available online: 15 August 2017

Subject Heading: INTERNATIONAL STANDARDS OF ACCOUNTING AND REPORTING

JEL Classification: G21

Pages: 868–879

https://doi.org/10.24891/ia.20.15.868

Kirizleeva A.S. Donetsk State University of Management, Donetsk, Ukraine
akirizleeva@mail.ru

Subject The article considers the priority matters of Ukrainian banks, like unification and standardization of accounting procedures and their compliance with International Standards of Accounting and Reporting, creation of reliable and adequate accounting system, which allows to make effective management decisions, convergence and streamlining of financial, tax, and management accounting.
Objectives The purpose of the study is to review the specifics of commercial banks' operations and their recording in financial and tax accounting systems.
Methods For the study, I employed methods of logical and statistical analysis.
Results The paper identifies shortcomings of the current legislation on organization of accounting and reporting, which are expressed in differences of basic documents regulating the accounting treatment in the country, i.e. the National Accounting Standards and IFRS. Many issues of harmonization of financial and tax accounting remain controversial. The issue of practical implementation of methods for taxable profit calculation and linking the indicators of balance sheet and tax returns in the accounting records of banking credit organizations is of particular importance.
Conclusions Harmonization of financial and tax accounting necessitates improvement of legal framework, namely, amendments to the laws on taxation and organization of accounting in banking institutions, creation of a favorable tax environment, which will encourage financial institutions to reliably report their profit in the balance sheet. Provisioning for impairment of assets (for standard and sub-standard loans) should be made from profit net of tax.

Keywords: accounting, harmonization, bank

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