Methodology for the Assessment and Improvement of Accounting for Loss Allowances for Expected Credit Losses on Impaired Financial Assets under IFRS 9: the Case of Receivables of Ukrainian Agricultural Enterprises

In conditions of martial law, macroeconomic instability, high credit risks, and deterioration in counterparties’ solvency, the problem of reliably assessing receivables and forming reserves for expected credit losses becomes particularly urgent. However, traditional approaches to assessing reserves for doubtful debts do not fully meet the requirements of risk management and the predictive assessment of credit risks required by IFRS 9. This article aims to reveal the practical aspects of applying the expected credit loss measurement methodology under IFRS 9 “Financial Instruments” and to improve the primary, synthetic, and analytical accounting for loss allowances for impairment of financial assets, using the example of receivables of Ukrainian agricultural enterprises. The research methodology includes abstract-logical, monographic, comparative, and computational-constructive (including the ECL method provided for in IFRS 9 “Financial Instruments”) methods, as well as a systematic approach, analysis, and synthesis. The article presents a simplified methodological approach to assessing expected credit losses based on payment history, receivables due dates, and analysis of counterparties’ payment reliability. The authors proposed a system of color-coded debtors’ credit risk zones based on ECL levels and signs of default. Also, they improved the organization of analytical accounting for financial assets by separating sub-accounts for expected credit losses directly on receivables accounts. An important part of the research results is samples of primary documents and analytical accounting registers developed by the authors for calculating and summarizing information on reserves for expected credit losses. The results of this study can be used to increase the reliability of financial reporting, improve risk management systems, strengthen the economic security of agricultural enterprises in Ukraine, and adapt national accounting practices to international financial reporting standards.