Methodological tools in the processes of income and expenditure accounting: Contemporary discussions and developments in Galicia at the turn of the century

Abstract

Analytical reviews at the international level highlight the issue of the quality of public reporting information on the performance of companies and their economic potential. The component and subject of these discussions is the use of alternative methods in the accounting system – “comparison of income and expenses” and the “balance sheet approach”, which significantly affect the results of the calculated indicators. The purpose of this study is to formulate proposals for solving existing problems and analyse the best practices of accountants in Eastern Galicia in the second half of the 19th and mid-20th centuries to identify successful ideas for their use in modern research. The study uses a system of general scientific methods and specific techniques to clarify the role and significance of accounting information in the architectonics of the modern economy. The scientific results substantiate the author's opinion that the information presented based on the approach of coordinating (comparing) income and expenses objectively reveals the level of performance of modern companies, and therefore, more meets the real needs for management processes and the functioning of the market mechanism. The paper substantiates that the methodology of “coordination of income and expenses” should be given more weight in accounting theory and practice, and the results obtained on its basis should take a more significant position in the system of market analytics criteria. The balance sheet approach with its fair value principles in the accounting system is considered necessary, but its application should be considered as an additional tool for providing information to investors and counterparties of the market process. On its basis, companies provide the capital and investment markets with information in their public financial statements about the state and structure of their actual financial and economic potential. The scientific results also include the methodological developments identified and evaluated in past studies, which are reasonably recognised as applicable to modern realities. The paper is valuable because the introduction of the studied methods into practice based on their proposed parity use and some provisions from past developments regarding the measurement of income and expenses will positively affect the information content and transparency of public reporting of modern companies