KOSZTOWE ASPEKTY TWORZENIA REZERW
COST ASPECTS OF CREATING PROVISIONS

Summary/Abstract: Provisions in accounting are an important category, not only in the balance sheet, but also in the financial result. The result of their creation is increasing of costs that affect lowering the entity’s financial result. The cost nature of the provisions causes that companies want to show a better picture of the financial situation and avoid their creating. It affects the reliability of the financial statements. The purpose of the article is to present the role of provisions related to the company’s costs in creating an entity’s image in the financial statement. The authors formulated a research hypothesis: „A detailed explanation of the costs of creating provisions favors the clarity of the financial statements”. The methods such as critical analysis of accounting standards, literature and case study were used to prepare this article.

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