Long-term financial investments are investments in various non-current assets that contain financial ones. This form of investment is classified according to certain criteria.
The objectives of accounting in the implementation of long-term investments can be represented 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 facilities;
- ensuring control over the 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 acquired or created independently fixed assets, as well as intangible assets. This also includes natural resources (for example, land);
- exercising control functions over the use of financing for long-term investments.
Long-term financial investments should be taken into account by accountants at historical cost and already upon the transfer of funds:
- in general, for construction and for its individual facilities (in the context of buildings and structures);
- for individual objects of fixed assets, land, intangible assets and nature management objects.
Classification of financial investments can be represented as follows:
- participation in the formation of the authorized capital of other enterprises (organizations), as well as in the creation of subsidiaries;
- municipal government securities;
- bills of exchange, stocks and other securities of enterprises and organizations (here you can also include debt);
- provided borrowed funds ;
- deposits on deposits;
- other long-term financial investments.
The following actual costs are accepted as financial investments in the acquisition of various assets:
- amounts paid under a contract with the seller;
- amounts paid to enterprises, organizations for consulting or information services related to the acquisition of these assets. If there are information and consulting services that were aimed at the actual implementation of financial investments, and the organization does not make such a decision, then these expenses should be included in operating expenses ;
- remuneration paid to intermediaries whose services contributed to the financial investment.
For long-term financial investments, the expenses actually incurred by the organization may decrease (or increase) in the amount of the exchange rate difference that is valid at the time of the transaction when purchased in any other currency than the ruble. However, in accounting, posting in fact is made in rubles.
There are nuances of accounting for actual costs when investing enterprise finance in the assets of any other joint-stock company. So, if these shares are quoted at an auction or exchange, and such a quote is constantly published, then the accountant needs to reflect in the annual financial statements (in particular, the balance sheet) these investments at market value in the event that such value is lower than the book value. And the difference is adjusted by the amount of the reserve, which is formed at the end of each year for the next of financial results.
Long-term financial investments are associated with a high risk of loss of funds by the enterprise, therefore, enterprises to solve this issue must necessarily have specialists in this field and relevant analysts to constantly monitor information in this area.
So, the main analytical tasks of financial investments include:
- analysis of the direction of long-term financial investments of the enterprise;
- analysis of their structure and main components;
- analysis of the source of funding for future investments;
- an assessment of the effectiveness of this form of investment for a long time.