Investments and capital investments are the basis of the investment activities of any enterprises. The importance of capital investment for the economy is obvious. They are necessary for:
- for nature conservation;
- development of health care, education;
- to improve the quality of work performed;
- for equipment modernization;
- expansion of enterprises, as well as increase in profit;
- improving product quality;
- Updating the funds of enterprises;
- development of areas of the national economy;
- solving the problems of unemployment and so on.
Capital investments
Capital-forming investments represent contributions to the expansion, construction, maintenance of existing production and so on. A part of capital-forming investments is capital investments. They are understood as certain costs that are aimed at the reproduction and creation of fixed assets. Capital investments are necessary conditions for the existence of any enterprise. The company, resorting to them, gets the opportunity to increase its profits in a short period of time. It is worth noting that long-term investments often lead to loss of profits, making the company unable to resist competitors.
Capital investments consist of the following parts:
- costs of installation and construction work;
- costs of research, scientific and other work;
- labor investments and other costs.
Assignments of capital investments are different. The main ones include the commissioning of the latest, as well as support for existing production facilities, changing conditions and labor productivity, improving product quality, mastering its new types, saving natural resources and so on.
There are general capital investments. It comes from the total amount of investments in a particular project. By new are meant those in which the existing production assets are not taken into account, additional ones are necessary for solving side problems, and conjugate ones are used in related fields.
Investment is always necessary. The source of financing is often a loan. Also, the sources include the profit of enterprises, state budget funds, and so on. Often they are limited, and this primarily means that the use should be as effective as possible. In the event that capital investments do not pay off or do not pay off in full, the company needs to change tactics. Delays can easily lead not only to the loss of new capital investments, but also to the fact that the company will be completely ruined (the loan has not paid off, but you have to pay for newly arising debts except to pay for it).
The main areas of capital investment include:
- expansion of enterprises. Such expansion is carried out by increasing the staff, acquiring new equipment and replacing the old, building new workshops, changing the destination of the old;
- reconstruction of enterprises. This refers to the reorganization of workshops, the modernization of equipment and so on;
- technical reorganization of existing enterprises;
- New construction.
An audit of capital investments is necessary to comply with regulatory documents and the taxation methodology used by the enterprise, as well as accounting. As a rule, his tasks are as follows:
- assessment of the state of analytical as well as synthetic accounting for capital investments;
- assessment of internal control of the capital investment system ;
- the study of the state, effectiveness, and also the legality of contributions;
- verification of compliance with all norms and rules that are specified in the legislation of the Russian Federation.