UTJECAJ FER VRIJEDNOSTI NA FINANCIJSKO IZVJEŠTAVANJE BOSANSKOHERCEGOVAČKIH POSLOVNIH SUBJEKATA
INFLUENCE OF FAIR VALUE ON FINANCIAL REPORTING OF BOSNIA AND HERZEGOVINA BUSINESS ENTITIES

Summary/Abstract: In the accounting theory and practice, it is considered that the valuation of balance sheet items according to the fair value model ensures more objective and accurate financial reporting, which essentially ensures an increase in the transparency and usefulness of financial statements for users of financial statement information. However, the question always arises is whether the user's expectations have been sufficiently met, and whether the measurement of fair value is adequate and applicable in certain circumstances. Based on this, attention will be focused on verifying the assertion: whether the application of fair value in the balance sheet positions of BiH business entities leads to more correct and objective financial reporting and a higher level of confidence in the financial statements. The analysis will include assets and sources of assets. Valuation of fixed assets at fair value has positive effects on the data presented in the financial statements, through improved property and financial position of the company, reduced level of indebtedness of the company and the possibility of using the realized revaluation reserves. Also, the application of fair value in economies with less developed capital markets, such as BiH, is often motivated by the effects it has on certain performance indicators, when applying for bank loans. Given all the above, the aim of this paper is to explore and summarize the ways of applying fair value in balance sheet items and to critically review the effects of its application on the financial statements of BiH businesses. Theoretical research will be complemented by empirical research based on a questionnaire, the results of which will be processed and analyzed with the help of descriptive statistics and t-test.

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