IMPACT OF THE TRANSITION FROM NATIONAL ACCOUNTING STANDARDS TO INTERNATIONAL ACCOUNTING STANDARDS ON THE COMPANY‘S WORKING CAPITAL

Abstract

In order to be able to compare the financial data of different companies, it is necessary to present the company's financial data in a language that everyone can understand. There is a need to standardize data submission forms. The purpose of International Financial Reporting Standards (IFRS) is to standardize the accounting rules applied in different countries, which would be applied by as many countries as possible. For this reason, financial statements will be easier to compare with each other. The transition from national accounting standards to international accounting standards has a significant impact on the financial reporting of companies, including working capital management. This article analyzes how a change in accounting standards in a company affects the main components of working capital - current assets and current liabilities. The study, based on a comparative analysis, examines the case of a specific company before and after the transition to international accounting standards. The results show that the transition to international accounting standards in the selected company had a negative impact on working capital. Decreased working capital for the company signals a change in the assessment of short-term solvency and financial stability of the company. The article provides practical insights for companies seeking to transition from national to international accounting standards and effectively manage working capital, emphasizing the strategic significance of changes in accounting standards for financial management.