Accounting Policies and Techniques Regarding Risks and Uncertainties’ Disclosure in Annual Reports

Author:Associate Prof. Camelia Iuliana LUNGU, Ph. D., Prof. Chiraţa CARAIANI, Ph. D., Prof. Chiraţa CARAIANI, Ph. D., Lecturer Gina Raluca GUŞE, Ph.D



Keywords:risks and uncertainties, corporate risk disclosure, financial statements, non-financial risks

Changing economic and regulatory environments, more complex business structures and risk management, increasing reliance on financial instruments and international transactions, and prominent corporate crises gave rise to risk reporting in non-financial sectors. \r\nThis paper is meant to develop an analysis of specific requirements regarding risks and uncertainties reported into the financial statements according to different standards (US-GAAP, IFRS, European directives). This kind of analysis will offer the opportunities of deeply research the concepts, the policies and the social and environmental indicators, as risks and uncertainties generating factors. The study reveals the recent policies and techniques developments in the disclosure of risk-related information in order to establish the current state of corporate risk disclosure. The incorporation of information on company risks within the present financial statements model will provide users with more realistic information, and will facilitate their decisions on which investments to make. \r\nThe present requirements for non-financial risks and uncertainties disclosure included in reporting standards were determined by entities’ activity. This may explain the lack of a theoretical framework to design the main concepts and policies for approaching and disclosing non/financial risks and uncertainties. Therefore, it is necessary a repositioning of standards settlers in order to establish risk measurement techniques related to environmental and social effects of entities’ activity.\r\nIt is the stand-point in developing corporate reporting requirements, based on current reporting standards.