Guidelines
for course work
"Accounting and 1C accounting"
for students of groups ME 61,62 and EM 61.
Department of Mathematical Economics
The main goal of the course work in the course “Accounting and 1-C Accounting” is not so much mastering the skills of maintaining accounting accounts and drawing up reporting documentation, but understanding the financial and economic information that is recorded by accounting, with the aim of mathematical modeling of the processes of the economic activity of the enterprise.
The guidelines consist of two parts. The first part provides basic information regarding the structure of the enterprise's balance sheet, profit and loss statement, and also provides the main indicators of the analysis of accounting information. The second part is devoted to the analysis of the course work.
Part 1. Basic information.
1.1. Balance sheet. Balance equation.
1.2. Gains and losses report.
1.3. Analysis of the financial condition of the enterprise.
Part 2. Instructions for completing coursework.
2.1. The essence of the course work.
2.2. An example of completing the first task.
2.3. An example of completing the second task.
Basic information.
Balance sheet. Balance equation
Formation of balance sheets is one of the most important tasks of accounting. Balance sheet generalization of information allows us to identify the financial and property position of an economic entity. This is achieved by dual grouping of accounting observation objects:
· according to their functional role in the process of production, economic and financial activities (economic content of the balance equation);
· according to the sources of formation of the property of a business unit (legal approach).
Balance sheets are designed to reflect the financial position of an economic entity at specific points in time: the date of creation of the organization; beginning and end of the reporting period; dates of preparation of interim financial statements; in cases of bankruptcy, liquidation, reorganization, for making management decisions and simply when such a need arises.
The basis of the accounting information system for any reporting or interim period is the incoming balance sheet. Subsequent facts of economic life change the balance sheet indicators. Accounting identifies, evaluates, classifies and records business transactions according to generally accepted principles, reflects and accumulates them in accounting systems, and brings them together to compile new balance sheets.
The balance sheet can be compared to a snapshot of the financial state of the enterprise, which reflects two images of equal size:
· what the enterprise has;
· from what sources this property appeared.
When constructing balance sheets, the following principles must be taken into account:
Monetary value– indicators are presented in a single monetary measure that generalizes the objects of accounting observation into a homogeneous information model.
Separate property – the balance sheet relates to the enterprise, and not to persons associated with it (owners, creditors, debtors, etc.); The asset takes into account property owned by the enterprise or under full control.
Continuity - The period of time during which the enterprise will exist is unknown, its liquidation is not planned.
Accounting at cost – assets are shown on the balance sheet at the amounts paid, or to be paid, to acquire them (original cost), rather than at current market prices.
Dualities – the concept of duality is evident from the fact that the assets on the left side of the balance sheet are equal to the total equity and borrowed capital on the right side.
The balance sheet as an element of the accounting method crowns the procedure for processing accounting data, summarizing them into an information model of the financial condition of an economic entity. The information of this model, presented in the form of reporting indicators of balance sheet lines of the main form of financial reporting, is a significant source in assessing the functioning of an economic unit, its production, economic and financial activities aimed at improving or developing the entire enterprise management system. Based on the data presented in the balance sheet, interested users have the opportunity to study the availability, placement and use of resources, solvency and financial stability of organizations and thus satisfy information needs. (see clause 1.3.)
The main element of the balance sheet (the unit of information reflected in it) is the balance sheet item (line). The balance sheet item corresponds to an indicator characterizing certain types of economic resources (assets) and the sources of their formation (owner's capital and attracted capital or liabilities).
In Russian accounting, the balance sheet is built based on the duality equation (Assets = Capital + Liabilities).
Balance sheet items are combined into groups. The basis of such a combination is the economic content of balance sheet items. Vertical relationships between balance sheet asset items suggest their arrangement in order of liquidity level. Less liquid items are reflected at the beginning, such as intangible assets, fixed assets, capital investments, etc., and at the end, the most liquid ones (cash on hand, in current and foreign currency accounts, etc.).
Balance sheet liabilities, like assets, are grouped according to the principle of increasing urgency of repayment of obligations. It begins with the foundation of the enterprise with own funds owners invested in the enterprise - authorized capital. This liability item, also called the financial resources of the enterprise, is the most stable. The authorized capital of an enterprise is considered formed when participants or shareholders make their contributions; its value can only be changed by the decision of the owners along with changes in the constituent and statutory documents of the enterprise. The amount of the authorized capital of an enterprise is the basis of its market stability, and in order to protect the interests of third parties doing business with this enterprise, this basis should not be undermined.
The authorized capital is followed by less stable items of equity, then liabilities that are due to be repaid in more than a year, and the balance sheet liability ends with short-term loans and accounts payable, items that can change values and share in the total balance sheet currency in a very short time.
Vertical relationships of balance sheet asset items influence the order of arrangement of balance sheet liability items. This is facilitated by horizontal relationships between the balance sheet items of assets and liabilities. For example, fixed assets are acquired from sources of own funds or long-term liabilities, and current liabilities are used mainly to replenish the current assets of an economic entity.
The figure shows horizontal relationships between individual sections of the balance sheet.
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Section I Chapter III
Non-current assets Capital and reserves
Section IV
long term duties
Section II
Chapter
V
Current assets Current liabilities
Characteristics of asset items
The process of generating balance sheet data includes a large number of accounting works of a wide variety of nature. Preparatory work includes inventory and adjustment of balances on accounting accounts, clarification of the value of property and liabilities, formation of funds and reserves provided for by accounting policies or current regulations, clarification of income and expenses between estimated reporting periods, identification of the final financial result of the organization’s work and reformation of the balance sheet, preparation of the turnover sheet, which must include all adjusting entries (corrected entries for transactions of the reporting year are corrected by reversal; for transactions of previous years, in addition to the reversal entry, the amount of profit is adjusted). All of the above procedures should be carried out only when preparing the annual balance sheet. Periodic balance sheets are compiled on the basis of current accounting book data.
Form No. 1 is drawn up at the end of the reporting period and is a synthesis of the opening balance sheet for accounts opened during the year based on entries in accounting accounts, which must cover the business process completely and correctly reflect financial and economic activities based on the relationship between economic phenomena ( which is reflected in the correct correspondence of accounts).
Since the final balance sheet is formed as a result of financial and economic processes, individual transactions and economic phenomena, the basis for its compilation is the data of accounting registers: the general ledger, the turnover sheet, order journals, and auxiliary statements. Based on these registers, the General Ledger is filled out, where the account credit turnover is shown as a total amount and taken from the data of the corresponding order journal, and the debit turnover is given in the context of a number of accounts and can be collected from a number of order journals. Based on these turnovers and balances of the previous period, balances at the end of the period are calculated. These balances, after reconciliation with the data of the analytical and synthetic accounting registers, are used to generate data from Form No. 1. At small enterprises that keep records in a simplified form for drawing up a balance sheet, the Book of Accounting of Business Transactions is used. Accounting registers can exist in the form of a computer database, and programs for processing accounting information that comply with accounting rules allow you to avoid routine work and balance sheet data is generated as correspondence of accounts and amounts are entered into standard forms of primary documents.
All articles of form No. 1 are shown in a time context: column 3 - “At the beginning of the year”; Column 4 – “At the end of the period (year, quarter). The balance sheet data at the beginning of the year is identical to the final balance sheet data of the previous reporting period (Due to the implementation of the continuity requirement) and is formed in a similar way.
Based on the principle of constructing a balance sheet in the sequence of increasing liquidity of assets and mobility of liabilities, the asset of Form No. 1 opens with the section “Non-current assets”, which includes property and rights of different nature. Their combination in one section occurred due to their belonging to the least liquid funds.
The subsection “Intangible assets” reflects the value of non-traditional objects that do not have a physical form, but have the ability to generate income. A feature of these objects is the ability to use them over a long period (more than one year), as well as a high degree of uncertainty in the amount of profit possible from their use. This type of property includes the cost of intellectual property and various types of rights (patents, licenses, rights to use various resources, organizational expenses, software products, etc.).
It is reflected in the balance sheet minus accrued depreciation (according to the net valuation rule). The cost of intangible assets through depreciation is included in the cost of production and distribution costs (for assets of trading and intermediary organizations). Depreciation is accrued evenly and monthly, based on the useful life of the object, the rate of monthly depreciation is calculated, if the useful life cannot be determined, it is taken equal to ten years, the rate of deduction is determined as the quotient of the original cost of the object without VAT and the number of months of useful use. . For intangible assets, the value of which does not decrease with the deduction of time, depreciation is not accrued (Organizational expenses, trademarks, service marks, etc.). For completely worn-out objects, depreciation is terminated.
The subsection “Fixed Assets” displays data on fixed assets, both operating and mothballed. Objects of this kind include: buildings, structures, equipment, household equipment, etc.
Fixed assets are repeatedly involved in the production process and represent the cost of long-term investments. Like intangible assets, fixed assets are reflected in the balance sheet at their residual value, i.e. according to the actual costs of their acquisition and construction minus the depreciation accrued on them. A change in the original cost is allowed in the following cases: reconstruction, modification, additional equipment, partial liquidation, etc.
It should be noted that fixed assets include only objects whose cost exceeds one hundred times the minimum wage. Depreciation is not accrued for a number of fixed assets. Objects of this kind include: objects of housing stock, external improvements received free of charge, objects whose consumer properties do not change over time, etc.
Objects whose cost is not depreciated include land and environmental management facilities. In the balance sheet, fixed assets are reflected at their residual value and are located on lines 120; 121; 122 (The indicator of line 120 is calculated as the sum of the indicators of lines 121 and 122). The line 120 indicator can be determined according to the General Ledger data as the difference between the sum of the balances in the accounts “Fixed Assets” and “Income Investments in Material Assets” and the balance in the account “Depreciation of Fixed Assets”.
The subsection “Construction in progress” includes only one balance line, which reflects the balances in the accounts “Equipment for installation”, “Capital investments”, “Settlements for advances issued”.
Under this article, the enterprise reflects the cost of unfinished construction in the form of an excess of capital investment costs over the cost of objects put into operation, the amount of advances issued in connection with capital investments, etc. This article also reflects interest on a loan received by an organization for the purpose of acquiring fixed assets before their commissioning, tax on the purchase of vehicles, delivery costs for installing equipment, and other costs.
The subsection “Long-term financial investments” includes the following articles: “investments in subsidiaries”, “investments in dependent companies”, “investments in other organizations”, “loans provided to other organizations for a period of more than 12 months”.
These items show investments in the conditional capital of other organizations, in securities of the state and legal entities, as well as various types of loans provided for a period of more than a year.
The source of information when filling out balance sheet items is the General Ledger for the accounts “Long-term financial investments” and “Valuation reserves”, the latter in the subaccount “Reserve for impairment of investments in securities.”
The section “Non-current assets” ends with the article “Other non-current assets”, which takes into account property that is not reflected in other articles of the section.
After filling out all the articles in the section at the beginning and end of the year using the appropriate sources of information (analytical accounting data, synthetic accounting registers), you should find the total amount of the enterprise’s non-current assets. To reflect it, there is an article “Total for Section I.” The indicator for this article, located in the balance sheet on line 190, is the sum of the indicators of all subsections and individual articles of the section “Non-current assets” at the beginning (column 3) and end (column 4) of the year accordingly, thus, the indicator of line 190 is calculated by calculation as the sum of data on lines 110; 120; 130; 140; 150.
The next asset section of the balance sheet is the “Current assets” section. Here we present property that is in circulation, i.e. in the process of economic activity, changing its natural material form and regularly turning into cash. The process of turnover of funds goes in two directions, on the other hand, property with a low degree of liquidity acquires it in the process of circulation, on the other hand, the company’s funds, which have absolute liquidity, take the form of reserves.
Section II of the balance sheet includes the following subsections: “Inventories”, “Value added tax on acquired assets”, “Accounts receivable for payments expected more than 12 months after the reporting date”; “Receivables for which payments are expected within 12 months after the reporting date”, “Short-term financial investments”; "Debit funds"; "Other current assets".
In the “Inventories” subsection, the enterprise reflects the remains of raw materials, various types of materials, household equipment, work in progress, finished products, goods, etc. The subsection opens with the article “raw materials and other similar values”, which reflects the material assets recorded in the accounts: “Materials”, “Procurement and acquisition of materials”. “Deviation in the cost of materials” “Low-value and high-wear items”; "Wear of the MBP."
The amount of balances for this balance sheet item depends on the method of writing off the actual cost chosen when forming the accounting policy. Materials of the same type can be purchased at different prices; as a result, the balances will be recorded at different values; it is necessary to determine the value of the remaining materials after writing off some of them for production. There are three methods of determination: at the cost of the first purchases (FIFO); at cost of last purchases (LIFO); at average cost. When using the LIFO method, balances are valued at the cost of the first acquisitions, which, in the face of rising prices for materials, leads to a decrease in profits and an underestimation of the value of inventories. With the FIFO method, balances are assessed satisfactorily to the reality requirement.
In the next article of the “Inventories” subsection, the organization reflects the balance of low-value and wearable items. This type of property includes household and production equipment, various kinds of low-value items that serve as means of labor, however, due to their properties, are included in working capital. Low-value and wearable items include items that last less than one year (regardless of cost) and cost at the date of purchase less than 100 times the minimum wage. Enterprises and organizations are given the right to set a lower cost limit.
Low-value and wear-and-tear items (IBP) cannot include agricultural machinery, working and productive livestock.
The next article in the subsection is the article “Costs in work in progress.” In it, the enterprise reflects the costs accounted for in the cost accounts: “Main production”, “Auxiliary production”, “Semi-finished products of own production”, “Completed stages of work in progress”, “Non-capital work”. In addition, this balance sheet item also reflects distribution costs (for organizations engaged in trading and intermediary activities).
The article “Finished products and goods for resale” reflects the cost of products that have completed their production cycle, as well as goods purchased for resale.
Goods sold on commission are reflected in the “Goods shipped” account and are not reflected in this balance sheet item. Goods accepted for commission are not reflected in the balance sheet at all.
It should be added that finished products consumed at the enterprise itself for production needs cannot be accounted for under this item of the balance sheet; they are accounted for in the accounts of materials, intermodal products, semi-finished products, etc.
Line (216) of the balance sheet contains the item “Goods shipped”. In it, the organization reflects the cost of goods and products shipped to customers, but before the transfer of ownership rights belonging to the enterprise. (Products and goods are accounted for under this article of Form No. 1 until the purchase and sale transaction is fully formalized with the relevant documents).
The next item in the balance sheet is the item “Deferred expenses”, which reflects the amounts of expenses incurred by the organization in the reporting period, but subject to repayment in the following reporting years during the period to which they relate.
Future expenses may also include: expenses for the preparation and development of production, rent payments for subsequent periods of time, expenses for the repair of fixed assets, if the organization does not create a repair fund, subscription to periodicals, expenses for training and education of specialists.
The next subsection of working capital is the article “Value added tax on acquired assets”.
This reflects the amount of value added tax (VAT) on purchased material assets and excise taxes on excisable goods. Supplier invoices separately highlight VAT amounts that are subject to debit to account 19 “Value added tax on purchased assets” in the context of the corresponding subaccounts (VAT on purchased small business enterprises, VAT on materials, VAT on works and services, etc. )
The “Inventories” subsection ends with the “other inventories and costs” article. This item reflects inventories and costs that are not reflected in other items of the subsection. Part of the business expenses related to the balance of unshipped products and unsold goods may be reflected here.
The following two subsections of current assets reflect the amount of receivables of the enterprise (organization), which is recorded in settlement accounts.
The overwhelming majority of accounts receivable are debts from buyers and customers for finished products and goods. Thus, the enterprise’s funds frozen in settlements represent a commercial loan that facilitates the process of forming its reserves and costs for the counterparty enterprise.
In the balance sheet, the value of property in calculations is presented in two subsections: “Accounts receivable, payments for which are expected more than 12 months after the reporting date” and “Accounts receivable, payments for which are expected within 12 months after the reporting date.”
The first article of the subsections is the article “buyers and customers”, which reflects the cost of goods shipped, work performed and services rendered under the contract until payment by the buyer or customer.
The next article of the subsections reflects the debt of buyers and customers, secured by bills received.
Line 273 contains the item “debt of subsidiaries and dependent companies”. This reflects the state of inter-balance sheet settlements between the main company and dependent subsidiaries. The settlement state can be either active or passive. The balance sheet asset reflects the balance of debt of subsidiaries (dependent) companies to the dominant, parent company.
As part of short-term receivables, there is an article “debt of participants (institutions) for contributions to the authorized capital.” It shows the status of settlements with the founders.
Account 75 “Settlements with founders” also reflects the accrual of dividends to third parties (the source is retained earnings), therefore, if the account has a credit balance, then this amount of debt is taken into account in the liability side of the balance sheet as part of accounts payable.
The next item in the accounts receivable subsections is the item “Advances issued.” In modern economic conditions, counterparties of enterprises sometimes require advances and prepayments for products, goods, work or services, both for the entire transaction amount and partially.
This section section can be completed based on analytical data on the state of both subsections of accounts receivable or in the absence of any type of it.
The accounts receivable sections end with the item “Other debtors”. In accordance with the rules for constructing a balance sheet, debts to the enterprise from various legal entities and individuals, government agencies, which are not reflected in other articles of the subsection, are reflected here. For example, here may be reflected the amount of debt on claims, the balance on settlements with the budget for overpayment of taxes, as well as the balance on extra-budgetary payments, debt to the enterprise of employees who received loans, debt to accountable persons for amounts issued to them.
The next division of current assets is the group of articles “Short-term financial investments. Investments made by the organization for a period of no more than a year are shown here. The items “Investments in dependent companies” reflect the amount of investments of organizations in the account of balance sheet investments.
The subsection of short-term investments ends with the article “Other short-term financial investments.” This may include the enterprise's investments in securities of various elements, loans provided by the enterprise to construction organizations.
The total amount of funds in the subsection “Short-term financial investments” in accordance with the structure of the balance sheet can be found by arithmetically simple addition of the amounts of balances for all items of the subsection (This is also true for other subsections of any part of the balance sheet).
The next subsection of working capital is the group of articles “Cash”, which reflects property that most often has absolute liquidity, i.e., in the form of the currency of the Russian Federation; in addition, less liquid property is also represented here, such as foreign currency.
Under the article "cash" of the enterprise. Organizations reflect the amount of funds accounted for in account 50 “Cash”.
Under the item “current accounts” the amount reflected is accounted for in account 51 “Current account”. The debit of this account reflects the receipt of funds, and the credit reflects the write-off.
The next article of the subsection – “Currency accounts” – reflects the amount of funds in foreign currency, which is recorded in account 52 “Currency account”.
The item “Other funds” reflects funds held in special bank accounts in the form of monetary documents and the amount of transfers in transit. Accounting for funds from special accounts is kept on account 55 “Special accounts in banks”. It shows the movement of funds in domestic currency in the form of various payment documents (letters of credit, checks, other payment documents, except bills).
The last subsection of Section II “Current assets” is the article “Other current assets”. This reflects the working capital of enterprises and organizations that are not reflected in other articles of the section.
After filling out all the articles in the section, it is necessary to calculate the total amount of funds invested by the organization in working capital. In the line “total for section II” it is necessary to add up all the amounts of subsections and individual articles that act as subsections. Thus, the indicator of line 270 is found arithmetically and represents the sum of funds on lines 210, 220, 230, 240, 250, 260, 270. (The total amount of the section is reflected on line 290)
After filling out the articles of all asset sections of the balance sheet, you should summarize its overall result, which will be the total value of the organization’s property, provided there are no losses. To reflect the total of Form No. 1 or the balance sheet currency, the “Balance” line is intended, the indicator of which is the total total of the main reporting form and is subtracted as the sum of the indicators of the section of Form No. 1.
(Balance Sheet Equation) - a formalized expression of the relationship between the system-forming elements of balance. Balance sheet the equation connects the main sections of the balance sheet, sets its format and thereby explains the logic of its presentation in the form of a reporting form. In principle such equations several, especially when we are talking about an analytical balance, which means some transformation of the original (i.e. reporting) balance sheet, performed for analytical purposes, but the main balance equations three. The balance sheet is the main information source characterizing the company as a participant in economic relations. The fate of a company depends on several groups of persons who have actual and (or) potential interests in it (or in it). In this context, three main groups can be distinguished: (a) owners, (b) investors, (c) managers and counterparties.Owners. This group includes liaisons that ensure the existence of the company as a legal entity, since formally the owners have the right to decide to liquidate the company. They provide the company with the initial capital necessary for its establishment, make decisions regarding the withdrawal of part of the income received, attracting long-term external investors, etc. The balance sheet, built based on the interests of the owners, is designed to demonstrate the change in their capital, i.e. their interest in the company's assets. Thus, the balance sheet currency shows the owners' capital, which is numerically equal to the net assets in the accounting valuation.
In this case balance equation
Balance sheet the equation
A - LTL - STL = E, (B1)
where A is the amount of the company's assets;
LTL - long-term liabilities of the company;
STL - short-term liabilities of the company;
E - owners' capital.
The table shows an enlarged balance sheet format in a horizontal view. Corresponding to it balance sheet equalization
BALANCE SHEET Asset Liability Company assets (A) Raised funds (LTL + STL) (subtracted) Owners' capital Balance sheet (total net assets) Balance sheet (total owners' capital)
neither is the main one, for example, in British accounting, a vertical presentation of the balance sheet is used, and the key items that determine its structure are as follows.
Balance Layout
(vertical view)
Article Amount
company vision. The balance sheet, built based on the interests of investors, is designed to demonstrate the change in their total capital, i.e. this is a demonstration of the company’s power in a strategic aspect (the following circumstance is meant: investors’ funds are immobilized in the company for a long period, i.e., in the amount of resources provided by them, it will exist for quite a long time; as for short-term obligations, they are of a opportunistic nature , and their value is determined by the technological features of the company’s production and commercial activities and the policy of its management personnel in relation to short-term assets and liabilities). In this case balance equation and the format of the balance sheet as a possible reporting form in the enlarged structure of items is as follows.
Balance sheet the equation
4"
51
E-t-?+t. (B2)
BALANCE SHEET Asset Liability Non-current assets of the company (LTA) Current assets (STA) Current liabilities (STL) (subtracted)
Net current assets (NCA = = STA - STL) Owners' capital (E) Long-term liabilities (Ш.) Balance sheet (total assets minus short-term liabilities) (LTA + NCA) Balance sheet (total long-term sources) (E + 1ЛЪ)
To be fair, we note that for the purposes of reporting, the format specified balance equation(B2), not applicable; Such balances are used mainly in financial analysis.
Managers and contractors. The most common in international accounting practice is the balance sheet, in which all the assets, capital and liabilities of the company are presented in detailed form. This format allows you to get a fairly complete picture of the company’s generating capabilities, on the one hand, and the structure of sources of financing.
of its activities - on the other. This is a demonstration of the total strength of the firm's assets and capital (in the broad sense of the word) managed by its top managers. This is precisely what explains the fact that this format is aimed primarily at actual and potential managers and counterparties of the company, i.e. on those on whom the stability and routine (in the good sense of the word) of current activities depends. Balance sheet the equation and the format of the balance sheet as a reporting form in the enlarged structure of items is as follows.
Balance sheet the equation
A = E+ [LC + YP. (BZ)
BALANCE SHEET Asset Liability Non-current assets of the company (LTA) Current assets (STA) Owners' capital (E) Long-term liabilities (LTL) Short-term liabilities (STL) Balance sheet (total assets) (A = LTA + STA) Balance sheet (total sources of financing) (E + LTL + STL)
It is appropriate to make the following remark. The balance sheet is based on a system of accounts, transactions on which are reflected on the double entry principle, and the logic of reporting in general and the balance sheet in particular is such that various options for grouping and regrouping accounting and reporting data are acceptable. Therefore, by manipulating the composition of items and their inclusion or non-inclusion in one or another section of the balance sheet, it is possible to obtain formats with different balance equations, at the same time, it is obvious that all these formats are interconnected through the system of accounts and therefore differ from each other only in groupings.
Lecture outline (2 hours)
2. Structure and structure of the balance sheet
Purpose of the lecture: To study and know the role and significance of the balance sheet, its structure and structure; the relationship between the construction of the balance sheet and the classification of business assets; the procedure for grouping asset and liability items by sections of the balance sheet; information content of the balance sheet and its analytical properties; the concept of the types of changes in balance sheet items under the influence of business transactions.
Key words: Balance sheet, assets, capital, liabilities, liabilities, fixed assets, intangible assets, accounts receivable, financial investments, financial liabilities, accounts payable, share premium, authorized capital, retained earnings, reserves.
1. The essence and meaning of the balance sheet
To carry out economic activities, the subject has various objects (money, equipment, raw materials, etc.).
Objects (economic assets) are accounted for in accounting in two ways:
- by composition and functional role (assets);
- by sources of their formation (liabilities and capital - liabilities).
Investments – assets that an entity owns for the purpose of generating income in the form of dividends, interest or capital gains.
Financial investments – these are investments in stocks, bonds and other securities, as well as in bank deposits.
Accounts receivable – these are funds of an enterprise that are temporarily at the disposal of other organizations or individuals.
Debtor - this is a debtor of an enterprise who has received an advance for some purpose or has not paid any bills for goods supplied or services rendered.
Current tax assets – these are amounts overpaid to the budget in taxes and subject to reimbursement.
Fixed assets – these are tangible assets that operate over a long period of time (more than one year) and are used by a company for the production or supply of goods and services, for rental to other companies, or for administrative purposes (buildings, structures, equipment, vehicles, land and etc.).
Intangible assets – These are assets that do not have a natural physical form, but are endowed with “intangible value” and, because of this, bring additional income to the subject over a long period of time or permanently (trademarks, computer software, etc.).
Biological assets – these are assets related to agricultural activities, i.e. plants and animals.
According to the sources of asset formation, sources of own funds are distinguished ( equity ) and sources of borrowed funds ( borrowed capital, i.e. obligations ).
Equity
are the assets of an entity after deducting its liabilities.
Own capital includes: authorized capital, share premium, retained earnings, reserve capital.
Authorized capital
is formed from contributions from investors in the form of cash, equipment, vehicles and other means.
Authorized capital
– this is the start-up capital that a business entity needs for production activities in order to receive further income.
Unpaid capital – this is the debt of the founders for contributions to the authorized capital.
Share premium - this is the income received as a result of the excess of the selling price of shares over its nominal price at the time of issue and release of shares into circulation.
retained earnings is the financial result of an enterprise’s activities for a certain period.
Reserves. The source of formation of reserve capital is retained earnings.
Sometimes the creation of a reserve is required by constituent documents or legislative acts. Reserve capital is used to cover losses, to accrue dividends on preferred shares, and to repurchase own shares.
Liabilities - this is the obligation of a person (debtor) to perform certain actions in favor of another person (creditor), such as: transfer property, perform work, pay money, etc.
The entity's obligation arises from past events; settlement of it must result in an outflow of resources that embody economic benefits.
Liabilities are long-term and short-term (current).
Financial obligation - this is an obligation stipulated by the contract: to provide funds to another organization (bank loans received, accounts payable for accrued dividends, financial lease obligations, etc.).
Accounts payable – debt of a given enterprise to other enterprises or individuals (creditors).
Accounts payable include debt to suppliers and contractors, as well as debt on advances received, on bills issued, and deferred income. Accounts payable also include obligations to pay employees.
Thousands of business transactions are carried out at enterprises every day. At the same time, economic resources and their sources are constantly moving and changing.
In order to manage an enterprise, to control the safety and efficiency of use of the enterprise's funds, information is needed on the composition and value of its funds, the amount of its capital and liabilities for a certain period, on a certain date. This information is obtained using one of the elements of the accounting method - the balance sheet.
Balance sheet is an accounting method that allows you to reflect in monetary terms and at a certain date the state of the resources of an economic entity and the sources of their formation.
The term "balance" comes from the Latin words "bis" - "twice" and "lanx" - "scale" and literally means equality, characterized by two scales being in balance.
Graphically, the balance sheet is a table divided into two parts: the first reflects the funds owned by the organization (assets); in the second - the sources of formation of these funds - liabilities (capital and liabilities).
Based on this, the balance equation formula is as follows:
ASSETS = EQUITY + LIABILITIES
Those. In order to carry out economic activities, an enterprise needs funds and these funds must be given to the enterprise by someone. The funds owned by a company are called assets. Part of these assets is provided by the owner, the founder. The total amount of funds contributed by him is called capital. If the owner is the only one who contributed funds, then the equation A=K (assets equal to capital) will be fair. However, assets can also be contributed by someone other than the owner. What a business owes for these assets is called liabilities. Now the equation will take the following form: A = K + O (assets equal capital plus liabilities). The left and right sides of the equation are always equal, because the total size of economic assets is always equal to the source of their formation.
The balance sheet provides information about the nature and amount of investment in the enterprise's resources, liabilities and capital at a certain point in time. The balance sheet provides the basis for calculating the rate of return, assessing the capital structure, assessing the liquidity and financial flexibility of the enterprise.
2. Structure and structure of the balance sheet.
The main elements of the balance sheet are:
Ø assets are resources controlled by an organization as a result of past events from which the organization expects to receive economic benefits in the future;
Ø obligations- this is an existing obligation of the organization, arising from past events, the settlement of which will lead to the disposal of resources containing economic benefits from the organization;
Ø capital is the share of an organization's assets remaining after deducting all its liabilities.
In international practice, a balance sheet table can have horizontal and vertical forms, or the so-called accounting and reporting balance sheet formats.
a) Appearance of a horizontal balance sheet (accounting)
b) Appearance of the vertical balance sheet (reporting)
3. Elements of financial statements: Assets, liabilities, capital, income, expenses
In accordance with the Law of the Republic of Kazakhstan “On Accounting and Financial Reporting” (Chapter 3, Article 13), the elements of financial reporting are:
clause 1. The elements of financial statements relevant to the assessment of financial position are assets, liabilities and equity.
Assets are resources controlled by an individual or organization as a result of past events from which future economic benefits are expected to flow.
A liability is a present obligation of an individual entrepreneur or organization, arising from past events, the settlement of which will result in the outflow of resources containing economic benefits.
Capital is the share in the assets of an individual entrepreneur or organization that remains after deducting all liabilities.
clause 2. The items directly related to the performance measures in the income statement are revenues and expenses.
Income is an increase in economic benefits during an accounting period in the form of inflows or increases in assets or decreases in liabilities that result in an increase in capital other than an increase attributable to contributions from equity partners.
Expense is a decrease in economic benefits during an accounting period in the form of outflows or decreases in assets or incurrence of liabilities that result in a decrease in capital other than a decrease attributable to distribution to equity partners.
4. Changes in balance under the influence of business transactions and their characteristics
As a result of the economic activities of the entity, various business transactions occur that affect various economic assets. As a result of these operations, there is a decrease in some funds and an increase in others, or a simultaneous increase or decrease in two or more funds.
The following types of business transactions are distinguished:
Ø First type business transactions lead to changes in asset items with a constant balance sheet currency.
ΣA + O – O = ΣP,
where Σ – amount, A – asset, P – liability, O – operations
For example:
1) From the current bank account, funds in the amount of 40,000 tenge were received at the cash desk.
This transaction affects two balance sheet items: Cash in the current account and cash on hand. At the same time, the amount of money in the cash register increases by 40,000 tenge. Cash in the current account is reduced by 40,000 tenge.
Ø Second type business transactions leads to changes in liability items with a constant balance sheet currency.
ΣA = ΣP + O - O
For example:
2) A reserve in the amount of 300,000 tenge was created at the expense of the subject’s retained earnings.
At the same time, the item “Retained earnings” is reduced by 300,000 tenge, the item “Reserve capital” will increase by 300,000 tenge.
Ø Third type business transactions causes changes in asset and liability items towards an increase when the balance sheet currency is equal, i.e. the assets and liabilities of the balance sheet increase by the same amount.
ΣA + O = ΣP + O
For example:
3) Goods were received from suppliers in the amount of 50,000 tenge.
At the same time, the item in the balance sheet asset increases. “Goods” by 50,000 tenge, in liabilities the accounts payable increases by the amount specified in the transaction.
Therefore, both sides of the balance sheet increase by the same amount.
Ø Fourth type a business transaction causes changes in the asset and liability items downwards with the balance sheet currency being equal, i.e. the asset and liability balance sheet are reduced by the same amount.
ΣA - O = ΣP - O
For example:
4) 90,000 tenge was transferred from the current bank account to various creditors to repay previously formed debt.
At the same time, the item “Cash in current bank accounts” in assets is reduced by 9,000 tenge, and in liabilities, accounts payable is reduced by 9,000 tenge.
5. Users of financial statements
Users of financial statements are divided into two main groups:
1) internal;
2) external.
In turn, external users are divided into users with a direct financial interest and users with an indirect financial interest. The classification of users is presented in Figure 1.
Figure 1. Users of financial statements
Balance sheet
Lecture 2
Accounting regulatory system
Accounting is carried out in accordance with regulatory documents that have different statuses. Some of them are mandatory for use (Federal Law “On Accounting, PBU), others are advisory in nature (Chart of Accounts, guidelines, comments).
Depending on the purpose and status, it is advisable to present regulatory documents in the form of the following system:
Level 1: legislative acts, decrees of the President of the Russian Federation and resolutions of the Government of the Russian Federation, regulating directly or indirectly the organization and maintenance of accounting. Organization accounting;
Level 2: accounting regulations (PBU) they summarize the principles and basic rules of accounting both in general and in relation to certain types of activities. Currently, 24 PBUs have been adopted.
Level 4: working documents of the organization that form the direction of accounting in methodological, technical and organizational aspects. The main ones are: a document on the accounting policy of the enterprise; forms of primary accounting documents approved by the manager; document flow schedules; Chart of Accounts approved by the manager; internal reporting forms approved by the manager.
On January 1, 2013, the new Federal Law of December 6, 2011 No. 402-FZ “On Accounting” comes into force. Some of its provisions are very different from the norms of the current Federal Law of November 21, 1996 No. 129-FZ. (see table)
In accordance with the new law, documents in the field of accounting regulation include:
1) federal standards;
4) standards of an economic entity.
Accounting standard- a document establishing the minimum necessary accounting requirements, as well as acceptable methods of accounting;
Balance means balance, equilibration or quantitative expression of the relationship between the parties to any activity.
The balance sheet reflects the current state of economic assets and the sources of their formation at a certain point in time - the moment of drawing up the balance sheet (for example, the last day of each month).
The most common division of indicators in the balance sheet is the division into assets and liabilities. All other elements and groups belong to either an asset or a liability of the balance sheet.
The main element of the balance sheet is the balance sheet item.
Balance sheet items are summarized into sections, which makes it easier to review and analyze the information contained in the balance sheet. Balance sheet sections are formed separately according to asset and liability indicators.
The grouping of balance sheet items into sections and groups is subject to a certain principle, which is the basis for the economic classification of economic assets and their sources.
The assets in the asset are summarized in two sections in order of increasing liquidity. In Sect. I presents the least liquid assets, in section. II - assets with higher liquidity. The balance sheet liabilities are divided into three sections, arranged depending on the maturity of debts: from less urgent to more urgent. In Sect. III liability presents own sources of formation of property, in section. IV - long-term borrowed sources, in section. V - short-term borrowed sources.
Balancing indicators in the balance sheet are financial results (profit or loss). The mutual balancing of economic funds in the asset and their sources in the liability indicates the profit or loss received by the business entity at the reporting date. Thus, the balance sheet maintains constant equality of the total value of asset and liability indicators.
Table - Sections of the current balance sheet
The total total of asset and liability indicators is called “currency” of the balance sheet.
The basic balance equation is:
A = K + O = P
Where, A-a balance sheet asset (organization's funds); K - capital of the organization; О - obligations of the organization; P - balance sheet liability (sources of funds)
From the basic equation we can obtain the capital accounting equation:
Balance sheet
International standards assume that a given country's reporting is consistent with its national traditions. In accordance with this, international standards allow different balance formats: horizontal and vertical, which also have different compositions.
In any case, when drawing up a balance sheet, the basic balance equation must be preserved.
The Italian term balance in Russian means “scales”. The essence of the balance equation is that the total of the active part is equal to the total of the passive part, that is
A = P, or A = K + O,
where the letters A, K and O denote assets, capital and liabilities, respectively.
When considering balance, we will often use international terms that need to be brought into line with domestic ones: international term "Permanent assets" corresponds to domestic "Fixed assets", and the term "Current assets" corresponds to the term "Current assets". Terms "capital", "long-term liabilities" both in domestic and international reporting are the same, and in the international term "Current responsibility"(sometimes "creditors") corresponds to domestic "Short-term liabilities". Thus, the differences, from this point of view, are small.
So, assets are divided into permanent and current (or non-current and current assets), and liabilities - into long-term and short-term (current). In accordance with this, you can change the balance equation and present it as follows:
PA + TA = K + DO + TO,
where PA and TA denote, respectively, permanent and current assets, K is capital, and DO and TO are long-term and current liabilities. It is important to remember that the total values of all asset items and all liability items must always be balanced (equal to each other); balance (balance) of assets and liabilities is maintained using a double entry system, according to which each value associated with business transactions must be recorded twice. These will be either two entries in the active or passive part of the balance sheet (when one of the items will increase and the other will decrease), or one of the entries in the active and the other in the passive part (in this case, the items of the corresponding parts either increase or decrease in value ).
Before moving on to drawing up a balance sheet, let's look at the main categories of assets and liabilities.
Assets are usually divided into the following categories:
Permanent assets (non-current assets) – are divided into intangible and tangible (fixed assets); the latter include land, natural resources, buildings, machinery, equipment, vehicles that are used for a long period, usually more than a year; intangible assets are patents, licenses, trademarks, rights of use.
Current, or current, assets that turn over in a relatively short period of time (usually less than a year). These include assets such as inventories of raw materials, materials, finished goods, goods for resale, etc., accounts receivable (or accounts receivable), short-term financial investments (for example, loans or marketable securities), cash, and prepayments.
The main sources of asset acquisition are:
Capital (authorized capital received, for example, from the owners of the enterprise), to which accumulated retained earnings (or uncovered loss) is also added;
Long-term liabilities – various debt instruments with a payment term of more than 12 months), such as loans;
Short-term liabilities - debt to suppliers of goods and services, debt to the budget for taxes, debt to personnel for wages, as well as loans to be repaid within 12 months;
Having this information, you can begin to draw up a balance sheet.
Balance – horizontal format
This format can be called classic. In accordance with it, the active part of the balance is located on the left, the passive part on the right. This format is followed by most European countries, including Russia. The balance looks like this:
It is easy to notice that when drawing up a balance sheet in a horizontal format, all asset items are placed on one side, and all liability items on the other. The final figure (balance sheet currency) is the sum of all assets and an equal value: the sum of all liabilities.
In addition to the horizontal balance sheet format, currently, in accordance with IAS recommendations, two vertical formats are used. In addition to their location (vertical), these formats differ from horizontal ones in composition.
Vertical Balance Sheet Formats
The most widely used form is the vertical balance sheet, net, with the allocation of net assets, or the net value of the enterprise (i.e., the balance sheet currency in this case is equal to the net value of the enterprise or net assets). So, let's look at the balance sheet in a vertical format with net assets highlighted, which is shown below. Please note that in the active part of the balance sheet there are (of course, with the opposite sign) two components of liabilities - current (short-term) and long-term liabilities. Working capital is highlighted as a separate item. You can get a balance in this format by transforming the balance equation:
PA + TA = KO + DO + K.
It is known that if the same quantity is added to both sides of the equation, the equation will remain the same. In this case, the value (– KO) is added to both parts:
PA + (TA – KO) = DO + K, or
PA + O K = DO + K, where O K is working capital.
The balance equation has been preserved, enriched with a new element, which will be discussed below.
You can obtain an equation for the net balance sheet, the passive part of which represents the net value of the enterprise. To do this, add the value (– TO) to both parts
PA + (TA – KO) – DO = K,
that is, capital, which, together with retained earnings, represents the book value of the enterprise.
The balance presented in a vertical format should be considered. The first of them is the net balance:
Vertical format (with net assets highlighted)