ORGANISING THE ACCOUNTING FOR INVESTMENT PROPERTY IN A HIGHLY VOLATILE MARKET

Анотація

The study examines the organizational and methodological aspects of accounting for investment property under conditions of high market volatility characterized by significant price fluctuations and pronounced regional differentiation. Particular attention is devoted to the analysis of the Ukrainian real estate market, where recent years have been marked by structural transformations, uneven regional development, and instability of price dynamics. Such conditions substantially affect the process of fair value measurement, the formation of financial results, and the overall reliability of financial reporting. The research investigates the theoretical and methodological foundations of accounting for investment property in accordance with International Financial Reporting Standards, particularly IAS 40 and IFRS 13. The study identifies key challenges associated with the application of fair value accounting in volatile markets, including the limited availability of reliable market data, increased subjectivity of professional judgment, and sensitivity of financial statements to short-term price changes. The advantages and limitations of both the fair value model and the cost model are critically assessed, with emphasis on their applicability depending on market conditions, information availability, and strategic priorities of reporting entities. A modified approach to fair value measurement is proposed, which extends the traditional discounted cash flow model by incorporating additional risk factors inherent in unstable market environments. Specifically, the model integrates adjustments for market volatility, asset liquidity risk, vacancy rates, and regional risk differentials. This approach allows for a more comprehensive reflection of economic reality and improves the reliability and relevance of accounting estimates for investment property. The findings demonstrate that in highly volatile market conditions accounting for investment property acquires not only an informational but also a strategic function, as it directly influences financial stability, investment decision-making, and stakeholder perception. The proposed methodological enhancements can be applied in the development of accounting policies and in improving valuation practices, contributing to a more balanced representation of asset values in financial reporting.

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