International Journal of Management and Economics Fundamental
72
https://theusajournals.com/index.php/ijmef
VOLUME
Vol.05 Issue 06 2025
PAGE NO.
72-74
10.37547/ijmef/Volume05Issue06-13
Improving The Accounting Of Securities And Problems
Of Their Recognition In Liabilities
Umarova Shakhnoza Keldiyor Qizi
Phd Student, Samarkand Institute Of Economics And Service, Uzbekistan
Received:
11 April 2025;
Accepted:
07 May 2025;
Published:
18 June 2025
Abstract:
Securities are vital components of modern financial markets, serving as tools for capital raising and
investment opportunities. This article examines the classification of securities
—
stocks, bonds, and derivatives
—
and analyzes their recognition as liabilities in Uzbekistan’s financial system. Despite significant growth in the
securities market, particularly through the Tashkent Republican Stock Exchange, the current accounting
procedures do not fully align with International Financial Reporting Standards (IFRS), impacting transparency and
investor confidence. The study employs analytical, statistical, and normative-legal comparative methods to
identify gaps in local practices and propose improvements. Key findings highlight the underdeveloped derivatives
market and inconsistencies in accounting standards. Recommendations include adopting IFRS, implementing
modern accounting software, training specialists, establishing clear regulations, and enhancing corporate
reporting transparency to strengthen Uzbekistan’s financial market and attract foreign investment.
Keywords: -
securities, financial market, liabilities, stocks, bonds, derivatives, IFRS (International Financial
Reporting Standards), accounting, transparency.
Introduction:
Securities are one of the key components of modern
financial markets, playing a significant role in fostering
economic relations. They serve as tools for raising
capital for enterprises, banks, and government
institutions
while
providing
investors
with
opportunities to generate income. In recent years,
Uzbekistan has taken notable steps toward developing
its financial market and aligning with international
standards. However, the classification of securities and
their recognition as liabilities still require improvement.
This article aims to define the classification of
securities, analyze their recognition process in financial
liabilities, and propose practical recommendations for
Uzbekistan’s financial market.
The development of Uzbekistan’s financial market is a
critical part of the country’s strategy to diversify its
economy and support the private sector. According to
the “Financial Market Development Strategy for 2020–
2025” approved by the President of Uzbek
istan,
increasing the volume of the securities market and
strengthening investor confidence are among the
priority tasks. However, the procedure for recognizing
securities as liabilities does not fully comply with
International Financial Reporting Standards (IFRS),
which undermines transparency and the reliability of
financial reporting.
Securities, including stocks, bonds, and derivatives,
have distinct characteristics, and their reflection in
financial statements is crucial for assessing an
organization’
s financial stability. While stocks and
bonds are widely used in Uzbekistan, the derivatives
market remains in its early stages of development. The
lack of clear standards for recognizing these securities
as liabilities, coupled with insufficient alignment of
local legislation with international practices, creates
challenges for investors and financial institutions. This
limits the market’s expansion and its ability to attract
foreign investment.
The primary objective of this study is to identify the
types of securities, examine the current procedure for
their recognition as liabilities, and propose ways to
improve it for Uzbekistan’s financial market. The
research addresses the following questions:
What types of securities exist, and what is their role in
financial liabilities?
How is the recognition of securities as liabilities carried
International Journal of Management and Economics Fundamental
73
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
out in Uzbekistan?
How can this procedure be improved based on
international experience?
The relevance of this article stems from the need to
adapt Uzbekistan’s financial
market to global
standards. Compliance with IFRS not only enhances the
transparency of local organizations but also increases
their attractiveness to foreign investors. To highlight
the practical aspects of the topic, statistical data,
tables, and charts are used. For instance, Table 1 below
presents the growth dynamics of Uzbekistan’s
securities market:
Growth Dynamics of Uzbekistan’s Securities Market
(2020
–
2024)
Table 1
Year
Market Volume (billion UZS)
Growth (%)
2020
578.15
-
2021
1,260.51
118
2022
4,816.21
282.1
2023
2,712.75
-43.7
2024
21,950
709.1
The data in Table 1 indicates that Uzbekistan’s
securities market has shown a growth trend. The total
volume of transactions conducted through the
Tashkent Republican Stock Exchange in 2024 was
approximately 37 times higher than in 2020. This
growth was primarily driven by stock trading.
Methodology
The research employs several methods, classified as
follows: analytical method, statistical analysis, and
normative-legal comparative analysis. Each method
was selected to address different aspects of the topic
and tailored to the characteristics of Uzbekistan’s
financial infrastructure.
Analytical Method: The main types of securities
—
stocks (ordinary and preferred), bonds (government,
corporate, bank), and derivatives (futures, options,
swaps)
—
are analyzed. Their characteristics, role in
financial liabilities, and application in Uzbekistan are
examined. For example, stocks are considered tools for
raising capital, while bonds are treated as debt
obligations. This method serves as the primary tool for
classifying securities.
Statistical Analysis: Numerical data from Uzbekistan’s
stock market and international financial markets are
analyzed. This method is used to identify growth
trends, market volumes, and the share of securities in
liabilities. Tables and charts are prepared to visualize
the data, enabling readers to better understand the
dynamics.
Normative-
Legal Comparative Analysis: Uzbekistan’s
legislation related to securities (e.g., the Law “On the
Secu
rities Market”) and IFRS (e.g., IFRS 9 –
Financial
Instruments) are studied. This method evaluates the
alignment of local procedures with international
practices and identifies specific gaps for improvement.
Discussion and Results
Based on the methodologies outlined, the main types
of securities are classified as follows:
Stocks:
Ordinary Stocks: Issued by companies to raise capital,
granting voting rights but no guaranteed dividends.
Preferred Stocks: Guarantee dividends but may have
limited voting rights.
In Uzbekistan, stocks are primarily issued during
privatization or traded on the stock exchange. In 2024,
the stock turnover on Uzbekistan’s stock exchange
amounted to approximately 19.18 trillion UZS, while
the corporate bond market recorded a trading volume
of 381 billion UZS.
Bonds:
Government Bonds: Issued by the Government of
Uzbekistan to finance infrastructure projects.
Corporate Bonds: Issued by private companies, such as
banks or large enterprises.
Bank Bonds: Used by financial institutions to ensure
liquidity.
Derivatives: Financial instruments such as futures,
options, and swaps. In Uzbekistan, the derivatives
market is in its early stages, accounting for less than
10% of the market.
The procedure for recognizing securities as liabilities in
Uzbekistan is governed by the Law “On Accounting”
and local accounting standards. The study revealed the
following regarding the accounting of securities:
Current Situation:
Bonds are recorded as debt obligations on the balance
sheet, including interest expenses.
Stocks are typically recorded as capital, but dividends
on preferred stocks may be treated as liabilities.
There are no specific accounting standards for
derivatives, leading to ambiguity in their recognition.
Issues:
International Journal of Management and Economics Fundamental
74
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International Journal of Management and Economics Fundamental (ISSN: 2771-2257)
Local standards do not fully comply with IFRS 9
(Financial Instruments), particularly in fair value
measurement and risk management.
Lack of transparency in reporting negatively affects
investor confidence.
The absence of clear rules for derivatives results in their
minimal recognition in accounting.
Differences in Recognizing Securities as Liabilities in
Uzbekistan Standards and IFRS
Table 2
Criteria
Uzbekistan Standards
IFRS 9 Requirements
Valuation Method
Nominal Value
Fair Value
Derivatives
Not Recognized
Recognized with Risk Management
Transparency
Low
High
International Alignment
Limited
Fully Aligned
The data in Table 2 highlights that ambiguities in
recognizing securities as liabilities lead to the following
consequences:
Investor Distrust: Lack of transparency complicates
attracting foreign investors.
Risks for Financial Institutions: Incorrect valuation of
derivatives and complex financial instruments
threatens financial stability.
Slow Market Development: Non-compliance with
international standards isolates Uzbekistan’s market
from the global financial system.
CONCLUSİON
The research findings indicate that while securities in
Uzbekistan (stocks, bonds, derivatives) can be clearly
classified, the procedure for their recognition as
liabilities does not meet modern requirements.
Although there is some order for bonds and stocks, the
derivatives market and accounting standards require
significant improvement.
To enhance the accounting of securities in Uzbekistan,
the following five recommendations are proposed:
Full Transition to IFRS: Aligning securities accounting
with international financial reporting standards will
boost investor confidence and ensure transparency in
reporting.
Introduction of Specialized Information Systems and
Software:
Using modern automated software for securities
accounting will reduce errors and increase efficiency.
Training
Qualified
Accountants
and
Auditors:
Developing training programs and certification systems
for accountants and auditors specializing in securities is
essential.
Clear and Unified Regulatory Frameworks: Developing
clear and unified normative documents for securities
accounting, with regular updates, is crucial.
Broader Disclosure of Securities Information in
Corporate Reports:
Companies should provide detailed and transparent
information about securities in their financial
statements to enhance accountability and analytical
capabilities.
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