Economics and Business Management

International Financial Reporting Standards in the national practice of accounting for revaluation and impairment of fixed assets

Nataliia Kuzyk, K. Shevchuk, T. Mishchenko, A. Venher
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Abstract

This study aimed to examine the impact of adopting International Financial Reporting Standards on the accounting practices related to fixed assets in Ukraine, particularly concerning their revaluation and impairment. The research focused on the application of International Financial Reporting Standards in Ukraine’s agricultural sector during the period 2022-2024. It analysed the implementation of International Accounting Standard 16, Property, Plant, and Equipment, and IAS 36, Impairment of Assets, as well as the influence of economic instability on the financial performance of enterprises. The findings indicate that the adoption of International Financial Reporting Standards has enhanced the transparency of financial reporting and improved the accuracy of fixed asset valuation, thereby strengthening trust in companies’ financial statements. However, the implementation of International Financial Reporting Standards has been accompanied by several challenges, largely due to economic instability, high inflation, and fluctuations in the fixed asset market. Taking into account data from 2023 to 2024, the average value of agricultural land in Ukraine in 2024 was 46,678 UAH per hectare, representing a 21% increase compared to the previous year. The study found that in 2024, the prices of agricultural machinery, particularly tractors, rose by 6.8%‑7%; however, sales of combine harvesters and sprayers declined by 25%-30% due to economic uncertainty. Impairment of assets, especially machinery, remains a significant factor affecting the valuation of fixed assets. The adoption of International Financial Reporting Standards has enabled the timely reduction of the carrying amount of such assets, thereby enhancing the predictive value of financial information for users of financial statements. The practical significance of this study lies in developing recommendations for improving fixed asset accounting in Ukraine’s agricultural sector through the application of International Financial Reporting Standards. This approach will help increase the transparency of financial reporting and strengthen the financial stability of enterprises amid ongoing economic uncertainty

Keywords

non-current assets; utility of assets; impairment; fair value; national standards; international accounting standards

Suggested citation
Kuzyk, N., Shevchuk, K., Mishchenko, T., & Venher, A. (2025). International Financial Reporting Standards in the national practice of accounting for revaluation and impairment of fixed assets. Economics and Business Management, 16(1), 214-233. https://doi.org/10.31548/economics/1.2025.235
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