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International Accounting
 

Economic substance of working capital as an object of accounting and analysis

Vol. 22, Iss. 7, JULY 2019

Received: 5 February 2018

Received in revised form: 12 February 2018

Accepted: 20 February 2018

Available online: 15 July 2019

Subject Heading: SCIENCE REVIEW

JEL Classification: O12, Q01

Pages: 828–842

https://doi.org/10.24891/ia.22.7.828

Savitskaya G.V. Belarus State Economic University (BSEU), Minsk, Republic of Belarus
glafira.savickaja@mail.ru

ORCID id: not available

Gudkova E.A. Belarusian State Agricultural Academy (BSAA), Horki, Mogilev Region, Republic of Belarus
alenagudkova@mail.ru

ORCID id: not available

Subject Recently, the concepts of working capital and current assets have been interpreted differently in economic literature. The lack of uniformity in terminology causes a gap in information flows that are generated in the accounting system and required for analysis and efficient financial management. This fact necessitates a deeper examination of their economic nature, substance and content.
Objectives We focus on a comprehensive study of problematic issues related to defining the economic substance of working capital based on its key parameters.
Methods Works of domestic and foreign economists on finance and capital management serve as a theoretical and methodological framework for the study. We employ historical approach, general and special methods of analysis, synthesis and analogies.
Results In the paper, we present our own position on defining the economic substance of current assets and working capital categories, their content and identification.
Conclusions The offered approach may contribute to further development of methods of financial analysis and serve as a methodological guidance for business entities to exercise control and make business decisions in their management of working capital.

Keywords: current assets, working capital, investment value, turnover, capital cycle

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