استانداردهای بین المللی گزارشگری مالی
Abstract
1-Introduction
2-The role of accounting estimates in valuation of investment property
3-Analysis of disclosed information on investment property’s accounting estimates of quoted Croatian companies
4-Conclusion
Acknowledgements
References
Abstract
Accounting estimates occur because a large number of items in financial statements cannot be measured precisely but can only be estimated. Significant accounting estimates are disclosed in the notes to the financial statements. The aim of the paper was to identify whether Croatian quoted companies disclose all information about accounting estimates related to the Investment property, as required by IAS 40. The research included 132 quoted companies in Croatia that apply IFRSs. The research results showed that investment property has a relatively small share in the structure of total assets of quoted companies in Croatia, which is probably one of the reasons why related accounting estimates published in the notes are brief and incomplete. The general conclusion is that the notes regarding accounting estimates on investment property are composed of definitions set in the standard, instead of providing more transparent information for investors and other interested users of financial statements. As expected, the companies with the higher share of investment property have shown greater level of transparency, providing additional information which is not required by the standards.
Introduction
Accounting estimates, along with accounting policies, are very important in achieving comparable financial statements. If applied in accordance with generally accepted accounting principles, standards and procedures, they contribute to the quality of the disclosed information. Accounting estimates occur because a large number of items in financial statements cannot be measured precisely but can only be estimated. According to the IFRSs, accounting estimates are judgments based on the latest available reliable information. They represent an important part of financial statements and should not reduce the reliability of information about companies’ financial health and efficiency. An entity has to disclose significant accounting estimates as well as the nature and amount of change in the accounting estimate that has an effect on the current period or which is expected to have an effect on the future periods. The aim of the paper is to identify whether Croatian quoted companies disclose all information about accounting estimates related to the recognition and measurement of Investment property, as required by the accounting standards (IAS 8 and IAS 40). The research includes 132 quoted companies in Croatia that apply IFRSs. The data source for the research is based on financial statements available on the website of Financial Agency, which is in charge of the publication of financial statements in Croatia. The first goal of the research is to identify the companies that publish the item Investment property in their balance sheets. The authors explore whether those companies disclose all the required information about accounting estimates of such assets in the notes to the financial statements. IAS 40 allows Investment property to be measured subsequently at cost or fair value. If a company applies a cost model, it is obligated to assess the useful life of Investment property and specify it in the notes to the financial statements, together with the fair value of the investment.