Published October 2025, Pg. 41-46

Section: Economy, management and law

UOT: 622.3:658

DOI: 10.37474/0365-8554/2025-10-41-46

The impact of changes in financial statement presentation on the accounting systems of industrial enterprises in Azerbaijan

T.N. Polukhov PhD in Economics - SOCAR

The paper provides a comprehensive analysis of the IFRS 18 – “Presentation of Financial Statements” standard, its structural approach, and the potential impact of this standard on the accounting and reporting systems of industrial enterprises in Azerbaijan. The implementation of the new standard promotes a shift from form to substance in the preparation of financial statements and explores the perspectives of separately presenting operating, investing, and financing activities. The author emphasizes that this approach enables a more objective assessment of the financial performance of industrial enterprises and allows for the delivery of clear and comparable information to investors, analysts, and government authorities. The study refers to one of the fundamental principles of IFRS – the concept of “economic substance over legal form” – and demonstrates that the new standard systematically integrates this principle into financial reporting. This concept is illustrated in practice through the example of industrial enterprises in Azerbaijan.
During the research process, various scientific approaches and methods were applied. In particular, methods of systematic analysis and logical generalization were employed. The accounting systems and reporting tools of Azerbaijani industrial enterprises were examined from both functional and analytical perspectives. The data obtained were thoroughly analyzed and used to derive well-substantiated conclusions. These methods enabled the researcher to achieve accurate and reliable results in line with the goals and subject of the study. 
As a result of the analysis, the author concludes that the implementation of IFRS-18 for industrial enterprises in Azerbaijan represents not merely a change in form, but also a qualitative transformation in accounting thinking. The standard contributes to a more functional and goal-oriented use of financial statements in both internal decision-making processes and external auditor engagements. From this perspective, IFRS-18 holds strategic importance in enhancing the culture of corporate reporting, increasing the accuracy of financially grounded decisions, and improving the level of transparency within the national financial system. In this context, methodological support from state bodies and independent audit institutions is considered particularly crucial. Ultimately, the author evaluates the implementation of IFRS-18 as a reform and transformation tool that enhances the functionality of financial reporting in Azerbaijan’s industrial enterprises and supports strategic management as well as international alignment.

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