This study highlights the growing challenges that have accompanied the occurrence of the digital economy, and focuses on the impact of the digital economy on financial statements
In line with its strategy for the period (2020-2025) and in the context of its research activities to support decision-makers in Arab countries, the Arab Monetary Fund (AMF) has released a study on “The challenges of applying accounting standards in the digital age”.
The study sheds light on the growing challenges that accompanied the occurrence of the digital economy on financial statements, accounting data, and the appropriate disclosure and presentation mechanisms of the digital companies, as they are considered unique challenges. The repercussions of those challenges continue and increase, and most of them are still under discussion.
The study indicated that the adequacy, nature, and integrity of financial and accounting data and the mechanism of their disclosure affect investment, administrative and financial decisions, and direct allocation of resources. This could be explained in light of the specificities of their intangible assets and obligations arising from the conduct of their business and activities across financial and international markets through increasingly sophisticated, highly complex, and specialized digital technologies. Therefore, it necessitates the development of global financial rules, policies, and standards to include dealing with the particularity of corporate data that emerged in the digital economy.
Furthermore, this paper highlights some issues surrounding intangible assets in the digital world, the challenges of recognizing this type of assets in financial statements, the way the users interact with the financial statements of the digital companies, and the challenges of using traditional financial performance indicators as an effective tool to achieve the company’s specific goals.
The full version of the study is available through the following link