DOI: 10.21202/1993-047X.14.2020.1.22-39

Financial-economic tools for identifying the signs of objective bankruptcy

Objective: to develop a concept and methodological approaches for establishing objective bankruptcy based on financial and economic tools.

Methods: the study used general scientific methods of cognition, including a systematic approach, analysis and synthesis, logical and comparative analysis, the method of grouping and generalization, expert analysis, methods of scientific classification, tabular methods of data visualization.

Results: the need to change the concept of determining insolvency by introducing the term “objective bankruptcy” is due to the need to revise approaches to its assessment, as well as the importance for the country’s economy of determining actual organizations that are bankrupt, and the ambiguity of the existing theoretical and methodological approaches to the analysis of problematic companies. To achieve the study objectives, the differences were identified between the traditional understanding of the signs of bankruptcy and a modern interpretation of an objective bankruptcy; a classification of characteristics and reasons of the objective bankruptcy was proposed; principles and methodological approaches to using financial and economic tools for objective evidence of the bankruptcy were elaborated; the general algorithm of substantiating the date of objective bankruptcy was proposed; the peculiarities of imposing vicarious liability on the entities controlling the debtor in case of objective bankruptcy are found.

Scientific novelty: for the first time, the economic and financial tools to establish the objective bankruptcy are disclosed in detail: the components of proximate analysis are identified, based on the characteristics following directly from the definition of objective bankruptcy, and in-depth (extended) analysis, revealing the financial-economic, organizational, managerial, investment reasons for its occurrence; the aggregate blocks of factors are allocated to identify the objective signs of bankruptcy; the algorithm is proposed for determining the moment of insolvency and specifying the amount of vicarious liability of the entities controlling the debtor, which involves implies not a purely accounting approach, but the one taking into account the actual conditions of the debtor’s activity, the amount of their obligations and the market value of property.

Practical significance: the main provisions and conclusions of the scientific work can be used: a) in scientific activities for further development of financial and economic tools for determining the objective bankruptcy of companies; b) in law enforcement practice when considering the issues of imposing vicarious liability on the entities controlling the debtor in case of bankruptcy; c) by the National Association of self-regulated organizations of trustees when developing a federal standard or guidelines for conducting a financial analysis of debtor companies by trustees.

Economics and national economy management; Objective bankruptcy; Vicarious liability; Good faith manager; Date of objective bankruptcy; Signs of bankruptcy; Causes of objective bankruptcy; Insolvency; Insufficient property; Economically justified plan; Entities controlling the debtor

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Bobyleva A. Z., Lvova O. A. Financial-economic tools for identifying the signs of objective bankruptcy, Actual Problems of Economics and Law, 2020, Vol. 14, No. 1, pp. 22–39 (in Russ.). DOI: http://dx.doi.org/10.21202/1993-047X.14.2020.1.22-39

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