Received 27.06.2025, Revised 12.11.2025, Accepted 23.12.2025

Features of financial reporting by small enterprises and microenterprises: Ukrainian and international experience

Vitalii Kuzoma

The study aimed to substantiate the theoretical and applied foundations for the improvement of financial reporting by small and micro-enterprises in Ukraine, considering international experience and the digital transformation of accounting processes. The methodological basis consisted of comparative and content analysis, generalisation of practices for presenting data in the extensible business reporting language format, and observation. The empirical base was formed based on official analytical and statistical reports. The obtained results identified key differences between the requirements of national accounting standards and international standards for small enterprises in terms of the composition of reporting, principles of asset and liability valuation, and disclosure of information. The study determined that the introduction of digital reporting formats and the harmonisation of methodological approaches increase the comparability and reliability of data, reduce the time needed to prepare reports, and lower the risk of arithmetic and classification errors. The study proved that the use of integrated information systems, in particular enterprise resource planning systems and cloud platforms, contributes to the formation of a single information space between accounting, tax and analytical subsystems. As a result, a structured model of the relationship between the digital level of reporting and the quality of financial data has been developed, as well as recommendations for harmonising the Ukrainian financial reporting system with European standards. The proposed model includes harmonisation of reporting formats, stricter requirements for explanatory notes and disclosure of information, and the introduction of internal control procedures to ensure comparability and transparency. The research materials can be used in the development of state strategies for modernising financial reporting, improving tax policy and increasing the investment attractiveness of Ukrainian enterprises in the process of integration into the European economic space

accounting; economic transparency; harmonisation of standards; digital data formats; management analytics; regulatory convergence; quality of information systems
59-72
Kuzoma, V. (2025). Features of financial reporting by small enterprises and microenterprises: Ukrainian and international experience. Innovation and Sustainability, 5(4), 59-72. https://doi.org/10.31649/vis/4.2025.59

References

  1. Akter, M., Kummer, T.F., & Yigitbasioglu, O. (2024). Looking beyond the hype: The challenges of blockchain adoption in accounting. International Journal of Accounting Information Systems, 53, article number 100681. doi: 10.1016/j.accinf.2024.100681.
  2. Al-Okaily, M., Alkayed, H., & Al-Okaily, A. (2024). Does XBRL adoption increase financial information transparency in digital disclosure environment? Insights from emerging markets. International Journal of Information Management Data Insights, 4(1), article number 100228. doi: 10.1016/j.jjimei.2024.100228.
  3. Annual report. (2024). Retrieved from https://www.stat.ee/sites/default/files/2025-04/Annual%20report%202024.pdf.
  4. Banera, N.P., & Heley, O. (2021). Financial reporting of small businesses: Assessment and ways to increase the informativeness of indicators. Scientific View: Economics and Management, 1(71), 55-62. doi: 10.32836/2521-666X/2021-71-10.
  5. Bautista-Mesa, R., Muñoz-Tomás, J.M., & Horno-Bueno, M.P. (2019). Does the IASB know the needs of SMEs? A comparative analysis between the IFRS for SMEs and full IFRS due processes. Spanish Accounting Review, 22(2), 203-217. doi: 10.6018/rcsar.382261.
  6. Bucior, G., & Jaworska, E. (2023). Bidding farewell to paper financial reports – are Polish micro businesses coping with the phenomenon. Procedia Computer Science, 225, 3395-3403. doi: 10.1016/j.procs.2023.10.334.
  7. Chicchini, D., Carello, L.A., & Cotona, M.L. (2024). Comparing digital sustainability reporting through the EU and US perspectives. In R. Lombardi (Ed.), Mixing accounting regulation and corporate accountability in the era of non-financial information, intangibles and digitalization (pp. 57-68). Rome: Sapienza Università. doi: 10.13133/9788893773065.
  8. Czech Statistical Office. (2023). Statistical yearbook of the Czech Republic – 2023. Retrieved from https://csu.gov.cz/produkty/statistical-yearbook-of-the-czech-republic-2023.
  9. Directive of the European Parliament and of the Council No. 2013/34/EU “On the Annual Financial Statements, Consolidated Financial Statements and Related Reports of Certain Types of Undertakings, Amending Directive 2006/43/EC of the European Parliament and of the Council and Repealing Council Directives 78/660/EEC and 83/349/EEC”. (2013, June). Retrieved from https://eur-lex.europa.eu/eli/dir/2013/34/oj/eng.
  10. Directive of the European Parliament and of the Council No. 2014/95/EU “Amending Directive 2013/34/EU as Regards Disclosure of Non-Financial and Diversity Information by Certain Large Undertakings and Groups”. (2014, October). Retrieved from https://eur-lex.europa.eu/eli/dir/2014/95/oj/eng.
  11. Dzhulii, L., Hrebinska, S., & Chenash, V. (2024). Features of accounting and taxation of small enterprises. Economy and Society, 70. doi: 10.32782/2524-0072/2024-70-164.
  12. European Commission. (2023). Implementation reports 2023. Retrieved from https://commission.europa.eu/publications/implementation-reports-2023_en.
  13. European Commission. (2024). Annual activity report 2024: Directorate general for internal market, industry, entrepreneurship and SMEs. Retrieved from https://commission.europa.eu/document/download/724e5745-c742-4242-b723-bcbf48de5fae_en?filename=GROW_AAR_2024_final.pdf.
  14. Federal Statistical Office. (n.d.). Industry, manufacturing. Retrieved from https://www.destatis.de/DE/Themen/Branchen-Unternehmen/Industrie-Verarbeitendes-Gewerbe/_inhalt.html.
  15. Fomina, O., Semenova, S., & Berezovska, D. (2022). Transformation of financial reporting of small enterprises according to IFRS. Foreign Trade: Economics, Finance, Law, 123(4), 44-59. doi: 10.31617/3.2022(123)04.
  16. Gogol, T., & Kolotok, V. (2020). Disclosure of non-financial information in small business reporting. Problems and Prospects of Economics and Management, 1(21), 174-182. doi: 10.25140/2411-5215-2020-1(21)-174-182.
  17. Hellman, N., Nilsson, H., Tylaite, M., & Vural, D. (2022). The impact of an IFRS for SMEs-based standard on financial reporting properties and cost of debt financing: Evidence from Swedish private firms. European Accounting Review, 31(5), 1175-1205. doi: 10.1080/09638180.2022.2085758.
  18. Incollingo, A., & Lionzo, A. (Eds.). (2023). The European harmonization of national accounting rules: The application of Directive 2013/34/EU in Europe. Cham: Springer. doi: 10.1007/978-3-031-42931-6.
  19. Kaya, D., & Koch, M. (2014). Countries’ adoption of the international financial reporting standard for small and medium-sized entities (IFRS for SMEs) – early empirical evidence. Accounting and Business Research, 45(1), 93-120. doi: 10.1080/00014788.2014.969188.
  20. Knuth, A., Saha, D., & Poluschkin, G. (2021). Progress and challenges in the digital transformation of businesses in Ukraine – results from a representative business survey. Retrieved from https://www.german-economic-team.com/en/publication/progress-and-challenges-in-the-digital-transformation-of-businesses-in-ukraine-results-from-a-representative-business-survey-2/.
  21. Kostash, T. (2025). Modernisation of financial reporting of enterprises in the digital economy. Actual Issues of Economic Sciences, 15. doi: 10.5281/zenodo.17215812.
  22. Kostyakova, A. (2025). Reporting without borders: Ukrainian realities in the context of IFRS. Economy and Society, 74. doi: 10.32782/2524-0072/2025-74-108.
  23. Kostyuchenko, V., & Kovalova, A. (2020). Adoption of IFRS for SME in Ukraine. Journal of Economics and Economic Education Research, 21(6).
  24. Kovalchuk, I. (2025). Harmonization of regulatory regulation of digitalization of state financial control in Ukraine: Challenges and prospects for adaptation to European Union standards. Customs Scientific Journal, 1, 23-29. doi: 10.32782/2308-6971/2025.1.3.
  25. Latif, S., Salleh, S.I.M., Ahmad, B., & Saif, F. (2025). ERP adoption and strengthening of management accounting and controls at a Pakistani manufacturing SME: A case study approach. South Asian Journal of Business and Management Cases, 14(2), 145-161. doi: 10.1177/22779779251349974.
  26. Law of Ukraine No. 996-XIV “On Accounting and Financial Reporting in Ukraine”. (1999, July). Retrieved from https://zakon.rada.gov.ua/laws/show/996-14?lang=en#Text.
  27. Lukianykhina, O., Suprunenko, S., Slavkova, A., Skorba, O., & Zavrazhnyi, K. (2024). Digital innovations in the fiscal policy of Ukraine: Promoting sustainable economic development. International Journal of Economics and Financial Issues, 14(4), 77-86. doi: 10.32479/ijefi.16202.
  28. Ministry of Finance of the Republic of Poland. (n.d.). Retrieved from https://www.gov.pl/web/finance.
  29. Mulyk, Y. (2021). Audit services market: The experience of Ukraine. Green, Blue and Digital Economy Journal, 2(3), 35-42. doi: 10.30525/2661-5169/2021-3-6.
  30. Nazarova, K., & Bondarenko, K. (2022). Vectors of XBRL reporting development in Ukraine. Scientia Fructuosa, 142(2), 81-93. doi: 10.31617/visnik.knute.2022(142)06.
  31. Ngaruko, F. (2023). Annual report 2023. Washington: World Bank Group.
  32. OECD. (2021). The digital transformation of SMEs. Paris: OECD Publishing. doi: 10.1787/bdb9256a-en.
  33. OECD. (2024). Financing SMEs and Entrepreneurs 2024: An OECD scoreboard. Paris: OECD Publishing. doi: 10.1787/fa521246-en.
  34. Polish Agency for Enterprise Development. (2024). Report on the state of the small and medium-sized enterprise sector in Poland. Retrieved from https://popw.parp.gov.pl/storage/publications/pdf/ROSS_2024.pdf.
  35. Reino, A., Rõigas, K., & Müürsepp, M. (2020). Connections between organisational culture and financial performance in Estonian service and production companies. Baltic Journal of Management, 15(3), 375-393. doi: 10.1108/BJM-01-2019-0017.
  36. Sarker, J. (2025). Cloud accounting system and financial reporting efficiency of SMEs. International Journal of Science and Business, 48(1), 75-91. doi: 10.58970/IJSB.2626.
  37. Schorn, P., Tempel, A., Bauer, R., & Klapdor, R. (2021). SMEs and IR: Evidence from Germany. In J. Dyczkowska, A. Szirmai Madarasine & A. Tiron-Tudor (Eds.), Development of integrated reporting in the SME sector: Case studies from European countries (pp. 21-44). Cham: Springer. doi: 10.1007/978-3-030-81903-3_2.
  38. Semenova, S., & Shpyro, O. (2019). Accounting policies of small enterprises in Ukraine and Germany. In Collection of scientific research papers State University of Infrastructure and Technologies Section “Economics and Management”, 46, 95-108. doi: 10.32703/2664-2964-2019-46-95-108.
  39. Smith, J.A., Reid, G.C., & Cardao-Pito, T. (2022). Call for papers: Accounting and accountability in small-to medium-sized enterprises (SMEs). European Journal of Management Studies, 27(3), 341-345. doi: 10.1108/EJMS-11-2022-112.
  40. Strategy of Ukrainian financial sector development until 2025. (n.d.). Retrieved from https://mof.gov.ua/storage/files/Strategy_FS_2025_eng.pdf.
  41. Vakun, O., Horodysky, M., Grabchuk, I., & Solovyov, B. (2020). Problems of implementing the XBRL reporting standard. Problems of Theory and Methodology of Accounting, Control and Analysis, 2(46), 3-8. doi: 10.26642/pbo-2020-2(46)-3-8.
  42. Verner, I. (Ed.). (2024). Statistical yearbook of Ukraine for 2023. Kyiv: State Statistics Service of Ukraine
  43. Yang, L.C., & Ming, C.W. (2024). Digital transformation and its effects on the financial performance of Malaysian SMEs. Journal of Digitainability, Realism & Mastery, 3(8), 21-32. doi: 10.56982/dream.v3i08.263.
  44. Yousaf, M. (2025). Determinants of firm performance: How to choose the best model among panel data models? Central European Management Journal, 33(3), 504-521. doi: 10.1108/CEMJ-05-2023-0229.