Harmonization of financial and tax accounting of deferred tax assets and liabilities in the context of European integration

Abstract

European integration processes in Ukraine are accompanied by the need to harmonize rules for preparing financial statements and determining tax liabilities. Differences between national accounting standards and international requirements in recognizing temporary differences lead to imbalances in the recognition of deferred tax assets and liabilities, affecting the reliability of financial information and the effectiveness of managerial decisions.

The purpose of this study is to substantiate the theoretical and methodological foundations for harmonizing financial and tax accounting of deferred tax assets and liabilities in the context of European integration.

The research methodology is based on general scientific and scientific and specialized methods, in particular analysis and synthesis for determining the nature of temporary differences, comparison method for evaluating national and international accounting practices, a systems approach for forming a comprehensive understanding of harmonization processes, as well as the method of logical generalization of results for formulating conclusions and recommendations.

The study identified key differences between financial and tax approaches to the identification and valuation of deferred tax assets and liabilities, which arise from the differing objectives of accounting systems. It was determined that harmonization of accounting requires alignment of principles for recognizing temporary differences, improvement of measurement procedures, and adaptation of the national regulatory framework to the requirements of international financial reporting standards. The necessity of implementing a unified conceptual approach to reflecting the tax effects of business transactions was substantiated, which will enhance the transparency of financial information and comparability of reporting indicators.

The conclusions of the study indicate that harmonizing financial and tax accounting of deferred tax items is an important prerequisite for Ukraine’s integration into the European economic area. The proposed directions for improving accounting practices will contribute to enhancing the quality of financial reporting, reducing information asymmetry, and strengthening the investment attractiveness of business entities.