Accounting for financial investments
Financial investments are classified according to the following features:
1) in connection with the authorized capital;
2) by ownership;
3) on terms for which are made (long-term, short-term).
Cost of securities: nominal, market (exchange), issuing (selling-nominal), book, accounting(xledger), liquidation.
In the presence of free cash and no need for their investment in the material and technical base (MTB) of an enterprise, this enterprise can make a financial investment. These investments, as a rule, represent the purchase of securities (securities). Currently, the following securities are distinguished: stocks, bonds, treasury bonds, options, futures contracts, etc.
All securities are in essence debt notes that are given to their holders (investors).
Specific securities differ in terms of borrowing and the rules of relations between the parties.
Shares – securities that confirm the ownership of the owner of a certain part of the property. The owners of common shares take part in the management, but their dividends are not constant. Holders of preferred shares receive a guaranteed dividend, but are not eligible to participate in management. The share has a nominal and real value, the nominal at the issue is determined by the size of the share capital, and the market is determined on the basis of quotations. The action is a perpetual securities.
Bonds are securities issued by an enterprise or an organization in order to cover a shortage of funds or to raise funds for large investment projects without the right to transfer ownership. The bondholder receives income in various forms. Bonds are term securities. The issuer receives funds for a specific period, after which it is obliged to return them to the investor or to present goods, benefits, etc.
Accounting(regnskapsfører kristiansand) of financial investments is conducted on account 58, the balance on account 58 is debit and is determined by the amount of financial investments made at the beginning and end of the period.
The debit of account 58 takes into account the acquisition of securities.
The loan account 58 takes into account the sale or redemption.
Analytical accounting(regnskapsfører) is conducted by type of investment:
1) for the acquisition of securities, account 58 “Financial investments” is used in correspondence with accounts 51 “Settlement accounts”, 52 “Currency accounts”, 08 “Investments in non-current assets”, 91 “Other incomes and expenses”;
2) for the sale of securities from account 58 “Financial investments” are written off to accounts 51 “Settlement accounts”, 52 “Currency accounts”, 91 “Other incomes and expenses”;
3) when repaying loans