THE ISSUE OF ENTERPRISES’ ACCOUNTING POLICY IN THE CONTEXT OF TODAY’S CHALLENGES

Abstract

This article examines the accounting policy as an integral part of the explanatory notes – a mandatory component of enterprises’ annual financial statements. The objective of the financial and accounting management is to prepare, adopt, and present financial statements that provide sufficient level of assurance that the information they contain is clear, understandable, necessary, and reliable for both internal and external users. This objective can be achieved through the development, disclosure, and consistent application of the enterprise’s accounting policy. The need for information is determined by its scope and usefulness – both for the management in making informed and proper economic, investment, and managerial decisions essential for the enterprise’s successful operations, competitive market positioning, and effective business continuity, and the for external users of its financial statements in determining their attitude towards the enterprise and maintaining business relationships with it. The reliability of the information in the financial statements means that it faithfully presents the financial results, financial position, cash flows, and performance of the enterprise; it reflects the economic reality and the substance of the operations, other events and processes carried out by the enterprise, and not merely their legal form; that the information is neutral, i.e. unbiased, that it is prudent, and complete in all material respects. To this, we would also add the requirement for the authenticity of the information contained in the enterprise’s annual financial statements.
The relevance of the issue of accounting policy in the context of the current conditions arises from a number of circumstances with which Bulgarian enterprises must comply. The most important of these are:
 the European Union’s concept of sustainable development requires environmental, social, and governance aspects to be placed at the core of every enterprise’s strategy, whereas the challenges associated with these aspects are of primary importance in today’s context of globalization, crises, various types of risk, digitalization of financial and accounting processes, and the integration of artificial intelligence into business. These objective facts make the disclosure of environment, social and governance-related sustainability information a major challenge for enterprises operating across all sectors and their related industries in the national economy – a challenge that necessitates compliance with European standards and good international practices in the field of sustainable development. The disclosure of such information requires new types of data to be provided to users of financial statements through the enterprises’ accounting policies.
 the admission of the Republic of Bulgaria to the Eurozone and the replacement of the Bulgarian lev with the common European currency (euro) as of 01.01.2026, will lead to changes in enterprises’ accounting policies. These changes relate to recording of all transactions, events, and processes carried out by enterprises in the course of their business in euros. According to legal requirements, as of 08.08.2025, enterprises must disclose all their transactions, events, and processes (both cash and non-cash) in both Bulgarian leva and euro.
This article focuses on the changes that are expected to occur in the accounting policies of Bulgarian enterprises as a result of the aforementioned objective circumstances.
The aim set out in the article is to clarify the changes in the accounting policy in order to provide complete, reliable, and necessary information to the users of financial statements to enable them to understand the enterprises’ activities in achieving sustainable development – both as a whole, and in its individual aspects, as well as to comprehend financial results, financial position, financial stability, cash flows, and business performance, which will now be presented in euro