Problematic Aspects of Accounting for Contributions to Share Capital of Companies in Investor

Abstract

Introduction. The process of creating, reorganizing, and liquidating enterprises has always been and remains an important object of accounting. In this regard, a considerable amount of scientific literature and articles have been published, analyzing the legislative, regulatory, and instructive basis for such accounting. However, it should be noted that issues related to the reflection in the accounting of the process of acquiring corporate rights by investors and the repayment of indebtedness for contributions to the share capital of subsidiary companies are understudied and highly controversial. Due to the time difference between these processes and the investor’s failure to reflect corporate rights in accounting and reporting as of their occurrence date, information users (creditors, investors, shareholders) will lack reliable data on the company’s assets, its financial and resource capabilities, development strategy, and risks. Therefore, there is a need to find ways to properly reflect corporate rights in accounting for the investor’s share in the company’s share capital in accordance with the statutory documents and further transfer of assets against the specified contributions.

The purpose of the study is to improve the methodology for accounting for contributions to the share capital of business entities in investor, which will allow for the formation of substantiated accounting and reporting information and making informed management decisions, taking into account the risks of enterprise activity and its development strategy. 

Methods. The research methodology is based on the application of a systemic approach to improving the accounting for corporate rights in the investor and the procedure for the repayment of indebtedness for contributions to the share capital. The following research methods were used: comparison, analysis, and synthesis - to determine the impact of investment processes on micro and macroeconomics, the role of accounting information in these processes; comparative analysis, scientific generalization - for analyzing the proposed variants of reflecting indebtedness of investors for contributions to the share capital in accounting; induction and deduction, abstract-logical - for improving the Chart of Accounts for accounting and the Instruction on its application to reflect the right to a share in the share capital of companies; cause-and-effect relationship, modeling, and formalization - for constructing a model for accounting for contributions to the share capital of business entities in the investor.

Results. The impact of investment processes on micro- and macroeconomics has been identified, emphasizing the role of accounting information in shaping the investment policies of economic entities. An analysis of the proposed variants of reflecting indebtedness of investors for contributions to the share capital has been carried out, based on which the authors have made their own proposals for solving this problem. In the Chart of Accounts for accounting for assets, capital, liabilities, and business operations of enterprises and organizations, as well as in the Instruction on its application, it is proposed to open subaccount 126 «Rights to a Share in the Share Capital of Companies» under account 12 «Intangible Assets,» which will allow for reflecting in accounting the fact of obtaining the right to a share in the share capital of the company in accordance with the signed statutory documents. For accounting for the occurrence and repayment of indebtedness for contributions to the share capital of a subsidiary company, it is recommended to use subaccount 682 «Internal Settlements.» It is emphasized that when accounting for operations related to investments in the share capital of business entities, the investor needs to calculate VAT obligations based on the fixed value of assets in the statutory documents in the form of inventories or non-current assets. A model for accounting for contributions to the share capital of business entities in the investor has been developed, which will provide reliable information support for investment processes in the enterprise.

Prospects for further research. Further research will focus on improving information support for contributions to the share capital of business entities in the investor to enable a substantiated assessment of their performance.