Date of objective bankruptcy: problems and solutions

Abstract

Importance: the absence of a single approved methodology for determining the date of the debtor’s insolvency makes it difficult for interested parties to establish it. Purpose: the study presents the question of the need to develop methodological approaches that determine the actual date of the debtor’s insolvency (objective bankruptcy). Research design: the authors, based on their own experience, developed and proposed a step-by-step algorithm for determining the date of the onset of objective bankruptcy, consisting of four stages, each of which is given a description and actions are determined, by performing which, and interpreting the results, it is possible to establish the onset of the actual date of insolvency (objective bankruptcy) of the debtor. Results: the proposed algorithm of actions was developed and tested during a series of forensic accounting and economic examinations on the issue of determining the actual date of onset of signs of insolvency, and can also be used to further improve financial and economic tools for determining the date of objective bankruptcy of the debtor.