INFORMATIVE ROLE OF CONSOLIDATED FINANCIAL STATEMENTS DRAWN UP IN ACCORDANCE WITH IFRS: THE CASE OF COMPANIES AT BANKRUPTCY-RESTRUCTURING PROCEEDINGS IN POLAND

In accordance with IFRS the objective of financial reporting is to provide useful information to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity (IFRS, The Conceptual Framework for Financial Reporting, OB2). This objective is even more important in case of stock-market listed companies, because of their specificity. In the market economy, also among listed companies, are not only strong, successful entities but also weak, affected by severe crises, or even entities conducting bankruptcy-restructuring processes. The companies conducting bankruptcy with a possibility to make an arrangement, are entities continuing their business operations. At the same time, they have serious financial problems and a substantial doubt about an entity's ability to continue as a going concern is probable. In order to reduce information asymmetry between stakeholders, the risk of bankruptcy and financial aspects of undertaken restructuring activities should be shown in the financial statements. The paper objective is to analyze principles and practices of presenting information about conducted bankruptcy with possibility to make an arrangement in consolidated financial statements made in accordance with IFRS. The problem of credibility of the information presented in consolidated financial statements in Poland in case of insolvency has been analyzed on the base of financial statements of two Polish stock-market listed companies, which conducted bankruptcy with a possibility to make an arrangement in recent years. In order to pursue the objective of this paper, literature studies and in-depth case study method has been applied.