ACCOUNTING AND AUDIT

GNYLYTSKA Larysa ¹

¹SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0003-2113-2064

Accounting as a tool of management of business risks

The article states the directions of improvement of theoretical and methodological principles of accounting with the purpose to increase its informativeness under risk recognition in the system of such accounting; evaluation of probability of loss of economic values by certain accounting items under the impact of risk; management of business risks. A current legislation does not recognize a risk as an accounting item, but provides a reflection of information about the facts of economic activity, caused by influence of risk, in the system of accounts. Hence, the article sets a link between risk and reason under a conditional fact, between risk and effect with an actual (real) fact of economic activity, which allowed to extend the methodological tool of recognition of risk as accounting item. The aforementioned, in turn, introduced methods of peer review of probability of economic benefits’ loss by certain accounting itemsunder the influence of risk. Application of these methods will give an opportunity to revise the technologies of reflection of certain item in the system of accounts. In particular, risk-effect and risk-reason (conditional fact of economic activity), which has considerable degree of probability of appearing (50-100%), have to be recognized as the accounting item with its further reflection in the system of balance accounts and in the financial reporting of enterprise. It is reasonable to revise the reservation possibilities to improve management of business risks. At the same time, two aspects require special attention: relevance of the amount of reserves and actual provision of formed reserves by proper assets. A reserve capital transforms only into an accounting category under the absence of working capital, as real tool of risk management, at a time of discharge of risk effects. This category describes virtually the formation of finance resources of an enterprise. In this context, there is an interesting practice of some companies that use short-term deposit accounts to reserve funds in order to ensure timely compliance with the requirements to separate groups of shareholders and creditors in case of unplanned risks.

Keywords: record-keeping, registration technologies, risks of entrepreneurial activity, vagueness, principles of confession of risk, backuping.

JEL: G32, M41

GNYLYTSKA L. . Accounting as a tool of management of business risks / L. GNYLYTSKA // Фінанси України. - 2014. - № 3. - C. 114-125.