Reserves In Traditional And Contemporary Accounting

  • Katarzyna Klimczak Accounting Department, Collegium of Management and Finance, Warsaw School of Economics, katarzyna
Keywords: Reserves, Valuation Reserves, Provisions.


The main aim of the article is to analyse concepts of reserves in traditional accounting models and the characteristics  of the area of reserves in contemporary global accounting standards. 

Concepts of reserves in different countries are deeply rooted in the socio-economic environment of accounting. The differences in the significance, role and the scale of creation of reserves are especially evident in the Anglo-Saxon and continental accounting

Reserves play a very important role in the accounting system of IFRSs– they provide a specific control mechanism which enables companies to verify economic benefits embodied in their net assets.

The analysis of the IFRSs rules concerning the creation of valuation reserves and provisions may lead to the conclusion that they are- above all – subject to true and fair view concept. The only purpose of reserves is to present faithfully the estimated loss in value of net assets. There are many requirements which are intended to prevent the undue use of reserves.

The area of reserves is becoming more and more complex. The sources of complexity of reserves go beyond their inherent features and stem from the general orientation of contemporary accounting towards a model of anticipated losses/gains  in net assets.


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