The Role of Balance Sheet Accounting in Taxation in the Context of Business Management

Abstract

In the conditions of constant business changes in the world economy and the development of new technologies, the role of accounting is becoming even more important. Modern trends demand from accounting not only accurate accounting of financial transactions, but also the ability to analyze large volumes of data, predict risks and help in the management of strategic decision-making. Therefore, it is important to constantly improve and adapt the accounting system to the changing conditions of market competition and the regulatory environment. At the same time, off-balance sheet accounting not only increases its significance as an enterprise management tool, but also becomes an important element of ensuring financial transparency and compliance with international reporting standards. Off-balance sheet accounting is an accounting system that is used to display and control objects that are important to the enterprise, but are not included in its balance sheet. These objects may include liabilities, risks, contracts, and financial instruments. Off-balance sheet accounting allows you to clearly separate your own assets from assets that are in temporary use or storage. Information obtained using off-balance sheet accounting can confirm or refute the accounting information provided by the business entity that manages these assets. This approach provides a more accurate picture of the company's financial situation and helps to avoid misunderstandings in financial reporting. It was determined that the role of off-balance sheet accounting for taxation consists in providing objective and complete information about financial transactions and objects that can affect the calculation of taxes, which in turn allows taking into account all important financial events that are not necessarily reflected in ordinary balance sheet, but may have consequences for tax accounting. For example, it can be the accounting of financial instruments (derivatives, options or forward contracts). These financial instruments may have tax consequences, such as taxation of profits from transactions with them, but they may be treated as financial instruments for financial reporting purposes and not necessarily be classified as property, plant and equipment. Keeping records of these financial instruments within the framework of off-balance sheet accounting allows enterprises to reliably reflect their financial activities and compliance with tax legislation. As such, it is an important tool for ensuring compliance with tax requirements and minimizing the risks of tax audits. The article examines the role of off-balance sheet accounting in enterprise management. Its main indicators in terms of information users are defined and additional potential indicators of off-balance sheet accounting objects in the context of taxation are proposed for use.