The usefulness of financial reporting in the process of market valuation of joint stock companies (Wykorzystanie koncepcji grup kapitalowych w regulacjach rachunkowowosci i ich wplyw na wysokosc kapitalow prezentowanych w sprawozdaniach finansowych)

The purpose of this article is to present the impact of the elaborated theoretical concepts of capital groups and the related concepts of consolidating financial statements adopted by the international accounting regulations (IFRS) for the items and the value of the capital, reported in the financial statements. This effect was analyzed on the example of selected Polish public companies listed on Warsaw Stock Exchange. Consolidated reporting concepts, developed at the turn of the 19th and 20th centuries implemented in accounting regulations differently affect the level of equity of capital groups, presented in the consolidated financial statements. Their example shows a clear trend in the transition from the proprietary concept to the entity concept, which corresponds to the general orientation of financial reporting from the perspective of the owners to the perspective of the stakeholders. The extended concept of the parent company used in the regulations of IFRS till the end of 2009, but mixed with the entity concept, has shown, that the equity of capital groups included both equity, attributed to the shareholders of the parent companies, but also assigned to the other shareholders of the subsidiaries (minorities). Only from 2010 there is a possibility of alternative uses of the pure entity concept, which contributes, in principle, to the even higher amounts of capital in the same operating conditions. In the present situation of possible parallel application of both concepts, the managements of the companies may recruit them at their own discretion, which may contribute to some manipulation on reported equity of capital groups, and the examples can already be observed in the practice of Polish companies. Analysis of financial data of certain Polish groups did not allow to formulate certain general conclusions, regarding the impact of an extended parent company concept on the level of equities of the Polish groups. In many cases, the impact of the controlled entities positively affected the reserves of the group, but many situations can also be observed in which the activities of subsidiaries weakened the group's reserves. In such situations separate financial statements of the parent are more favorable to the data presented in the consolidated statement. However, this may confirm the supremacy of the consolidated reporting on the separate reporting, which is characterized by a greater sensitivity to operational and financial operations of the parent in relation to their subsidiaries. In the case of consolidated reporting, the manipulation of transactions with controlled entities is largely neutralized by what more relevantly and objectively (neutrally) contributes to the evaluation of the effectiveness of the boards of the parent companies.