Long-term financial investments - a reflection of actual expenses in accounting

Long-term financial investments are investments in various non-current assets that contain financial assets . This form of investment is classified according to certain characteristics.

The tasks of accounting in the implementation of long-term investments can be presented in the form of:

- full, reliable and timely reflection of all expenses for constructed facilities in the context of their types, as well as the classification of these objects;

- Ensuring control over the conduct of construction, as well as meeting the deadlines for the commissioning of production facilities and other fixed assets;

- the correct calculation of the inventory value of the assets acquired or created independently, as well as intangible assets. This also includes environmental management objects (for example, land plots);

- implementation of control functions over the use of financing for long-term investments.

Long-term financial investments should be taken into account by accountants at the initial cost and already after the transfer of funds:

- in general for construction and for its individual objects (in the context of buildings and structures);

- for individual objects of fixed assets, land plots, intangible assets and environmental management objects.

Classification of financial investments can be presented in the following form:

- participation in the formation of authorized capitals of other enterprises (organizations), as well as in the establishment of subsidiaries;

- municipal government securities;

- Bills of exchange, shares and other securities of enterprises and organizations (here you can also include debt);

- provided loans ;

- deposits;

- other long-term financial investments.

As the financial investments invested in the acquisition of various assets, the following actual costs are accepted:

- amounts payable under the contract concluded with the seller;

- amounts paid to enterprises and organizations for consulting or information services related to the acquisition of these assets. In the event that there is information and consulting services that were directed to the actual implementation of financial investments, and the organization does not take such a decision, these expenses should be related to operating expenses ;

- paid remuneration to intermediaries whose services contributed to financial investment.

For long-term financial investments, the actual costs incurred by the organization may decrease (or increase) in the amount of the exchange difference that is valid at the time of the transaction when it is acquired in any other currency other than the ruble. However, in accounting, posting on a fact is made in rubles.

There are nuances of accounting for actual costs when investing an enterprise's finances in the assets of any other joint-stock company. So, if these shares are quoted at an auction or exchange, and such a quotation is constantly published, then the accountant should reflect in the annual financial statements (in particular, the balance sheet) the investment at market value if this value is below the balance sheet. And the difference is adjusted for the amount of the reserve, which is formed at the end of each year to the next of the financial results.

Long-term financial investments are associated with a high risk of loss of money by the enterprise, therefore in the enterprises for the solution of this issue there must necessarily be specialists in this field and corresponding analysts for constant monitoring of information in this direction.

So, the main analytical tasks of financial investments include:

- analysis of the orientation of long-term financial investments of the enterprise;

- analysis of their structure and main components;

- analysis of the source of funding for future investments;

- Evaluation of the effectiveness of this form of investment, invested for a long period.