ENHANCING COST ACCOUNTING PRACTICES IN THE ERA OF IFRS ADOPTION: A PATHWAY TO TRANSPARENCY AND EFFICIENCY FOR UZBEK ENTERPRISES

Abstract

Uzbekistan’s ongoing transition to International Financial Reporting Standards (IFRS) marks a pivotal shift toward global financial transparency and investor confidence. However, this transition exposes critical gaps in traditional cost accounting systems, which were designed under Soviet-era command-economy principles and remain ill-suited for IFRS’s fair-value and activity-based requirements. This study investigates how Uzbek enterprises–particularly in manufacturing, agro-industry, and services–can modernize their cost accounting frameworks to align with IFRS while improving managerial decision-making. Using a mixed-methods approach involving document analysis, enterprise case studies (n=12), and expert interviews (n=18), the research identifies systemic weaknesses such as outdated cost allocation methods, lack of activity-based costing (ABC) implementation, and poor integration between financial and management accounting. Findings show that firms adopting IFRS-aligned cost accounting report a 22–35% improvement in gross margin accuracy, better pricing strategies, and enhanced compliance readiness. The study proposes a phased national roadmap for cost accounting reform, including regulatory updates, professional training, and digital toolkits tailored for Uzbek SMEs. The results offer actionable guidance for CFOs, regulators, and accounting educators in emerging economies undergoing IFRS convergence.