Which is better - own funds or borrowed funds? Borrowed funds. Equity vs. Debt Ratio Own vs. Debt Account

Analytical accounting of debts on credits and loans is kept separately by types of credits and loans, by credit institutions and other lenders, by individual credits and loans (types of loan obligations).

In accordance with the provisions of PBU 15/01, debt on debt obligations may be urgent (the maturity of which, under the terms of the contract, has not come or extended (prolonged) in the prescribed manner) and overdue (debt on loans and credits received with expired repayment).

Note!

Accounting for urgent and overdue debts is kept separately on separate sub-accounts opened for accounts and.

The organization that received the borrowed funds, at the end of the payment period is obliged to carry out transfer of urgent debt into overdue, and this transfer is made by the borrowing organization on the day following the day when, under the terms of the loan or credit agreement, the borrower was supposed to repay the principal amount of the debt.

Paragraph 6 of PBU 15/01 allows borrowing organizations to take into account long-term debt on loans and borrowings by any of the two options, while the method used must be mandatory fixed in the accounting policy of the organization.

Option 1.

The borrowing entity accounts for borrowings under a long-term agreement as long-term debt before the expiration of the agreement.

Option 2.

The borrower organization first records the debt under a long-term agreement as a long-term debt and transfers it to a short-term debt at the moment when 1 year remains before the expiration of the agreement.

If an organization receives borrowed funds in foreign currency, then this operation is regulated by the Accounting Regulation "Accounting for assets and liabilities whose value is expressed in foreign currency" PBU 3/2000, approved by order of the Ministry of Finance Russian Federation dated January 10, 2000 No. 2n (hereinafter PBU 3/2000).

Borrowed funds can be provided not only in the currency of the Russian Federation - rubles, but also in foreign currency or in conventional monetary units. In case of receiving such borrowings, the borrowing organization is obliged to be guided by paragraph 9 of PBU 15/01:

“Debt on a loan granted to a borrower and (or) a loan received or expressed in foreign currency or conditional monetary units is accounted for by the borrower in ruble valuation at the exchange rate Central Bank Russian Federation, acting on the date of the actual transaction(provision of a loan, loan, including the placement of loan obligations), and in the absence of the exchange rate of the Central Bank of the Russian Federation - at the exchange rate determined by agreement of the parties.

Expenses in the form sum difference arise for the taxpayer if the amount of obligations and claims that have arisen, calculated at the exchange rate established by agreement of the parties in conventional monetary units on the date of sale (posting) of goods (works, services), property rights, does not correspond to the amount actually received (paid) in rubles.

The resulting difference between the ruble valuation of liabilities for date of acceptance for accounting of accounts payable and its ruble valuation at expense recognition date represents sum difference. It would be most correct to recognize the date of occurrence of sum differences - the date of repayment of debt under credit and loan agreements.

On March 13, the organization made a preliminary payment for goods that were accepted for accounting on March 20, 2006. The organization returned the loan amount to the bank on April 10, 2006.

In the accounting of the organization, the accountant of the organization reflected this as follows:

Account correspondence

Amount, rubles

Debit

Credit

The amount of the loan received

Advance payment for goods

Goods from the supplier accepted for accounting

Accounted for VAT on goods received

Advance payment for goods

Interest accrued on the loan received (30%: (365: 100) x 500,000 rubles x 11 days)

Interest accrued on the loan received (30%: (365: 100) x 500,000 rubles x 10 days)

Refunded amount borrowed money and the amount of interest due 500,000+ 4109.59 + 4520.54 + 4109.59

End of example.

Let us first explain what is meant by an investment asset.

“Additional costs incurred by the borrower in connection with obtaining loans and credits, issuing and placing loan obligations, may include costs associated with:

provision of legal and advisory services to the borrower;

implementation of copying and duplicating works;

payment of taxes and fees (in cases stipulated by the current legislation);

carrying out examinations;

consumption of communication services;

other costs directly related to obtaining loans and credits, placement of loan obligations”.

As we see, this list additional costs open. Such costs are reflected in the accounts of the borrowing organization in the reporting period in which they were incurred, and may be preliminarily accounted for as accounts receivable, with subsequent inclusion in operating expenses during the maturity of the loan obligation.

Example 3

Let's pretend that Building company On January 10, 2006, she received a loan from a bank in the amount of 1,000,000 rubles for a period of 6 months. At the same time, the organization paid third party organization for the examination of this agreement, a fee of 6,000 rubles (excluding VAT).

The entity's accounting policy stipulates that incremental borrowing costs are deferred and then charged to operating expenses over the term of the contract.

In the accounting of the organization, this will be reflected as follows:

Account correspondence

Amount, rubles

Debit

Credit

The costs of paying for the services of experts are taken into account

51 "Settlement account"

Paid expertise services

51 "Settlement account"

66 sub-account "Settlements on the principal amount of the loan"

Received cash under a loan agreement

Then, on a monthly basis, during the term of the loan agreement (6 months), the accountant will include in the operating expenses the corresponding part of the costs of examining the agreement.

91 sub-accounts "Other expenses"

Part of additional costs included in operating expenses

Order of organization accounting credits and loans is regulated by the Accounting Regulation "Accounting for loans and credits and the costs of servicing them" RAS 15/01, approved by order of the Ministry of Finance of Russia dated 02.08.2001 No. 60n.

Currency transactions to attract a loan are carried out in a non-cash manner and are recorded in the borrower's account at the time of receipt of funds. Foreign currency is credited to the organization's current currency accounts in authorized banks.

The borrowing organization accepts for accounting at the time of the actual transfer of foreign exchange funds credit obligations for the principal amount of the debt as part of accounts payable. The principal amount of the debt (debt) under the loan and (or) credit received from the lender is accounted for by the borrowing organization in accordance with the terms of the loan agreement or credit agreement in the amount of actually received funds.

Debt on a loan granted in a foreign currency is accounted for by the borrower in ruble terms at the exchange rate of the Bank of Russia effective on the date of the actual transaction.

Depending on the term of the loan, accounts payable can be short-term or long-term.

When receiving a loan or loan for a period of more than 12 months, an entry must be made in the accounting of the borrowing organization on the debit of the account for accounting for cash or other valuables received and the credit of the account.

The working chart of accounts may provide for the use of the following accounts:

The repayment of foreign currency loans is made within the terms established by the loan agreement. According to civil law, the organization's obligations to repay the loan are considered fulfilled after the foreign currency is credited to the creditor's bank account, unless otherwise provided by the agreement.

In accounting, the repayment of credit obligations is recognized at the time the funds are debited from the borrower's foreign currency account.

Depending on the content of bank credit and loan agreements, the existence of amounts of urgent and (or) overdue debts is established.

The agreement comes into force and becomes binding on the parties from the moment of its conclusion, for loan and credit agreements, this is the moment of transfer of funds.

If the terms of the agreement provide for the repayment of a foreign currency loan in parts, then the delay in the return of its next part gives the creditor the right to demand early return of the entire remaining amount of the debt and interest.

Foreign exchange transactions for the payment of penalties to fulfill credit obligations, carried out from the accounts of the organization in authorized banks or third parties in favor of residents and non-residents, can be carried out without a special permit (license) from the Bank of Russia.

In accordance with clause 7 of PBU 3/2000, the value of funds expressed in foreign currency in settlements (including settlements on loan obligations) with any legal entity and individual as of the date of preparation of financial statements, expressed in foreign currency, is subject to revaluation in ruble terms.

The exchange rate difference is reflected in accounting in the reporting period to which the date of fulfillment of payment obligations refers or for which financial statements are prepared.

The exchange rate difference between the ruble valuation of foreign exchange liabilities at the exchange rate set by the Bank of Russia as of the reporting date and their ruble valuation at the Bank of Russia exchange rate in effect on the date the funds were credited or on the date of the last revaluation is accounted for at the end of the current period.

The debt on the received credit (loan) in foreign currency is written off in ruble terms at the exchange rate of the Bank of Russia in force on the date of payment. At the same time, the organization records the exchange rate difference between the ruble valuation of foreign exchange liabilities at the exchange rate of the Bank of Russia effective on the date of return of foreign exchange funds and their ruble valuation at the Bank of Russia exchange rate effective on the date of the last revaluation.

Exchange differences resulting from the recalculation of the amount of the principal debt under the loan agreement are included in the financial results of the organization as non-operating income and expenses.

Thus, the exchange difference is recognized at each revaluation of funds in settlements on loans and borrowings in foreign currency on the reporting date, as well as on the date of fulfillment of credit obligations (repayment of the loan).

Example 4

The organization received a loan of $150,000 for 2 months.

The exchange rate of the US dollar against the ruble was (conditionally):

Account correspondence

Amount, rubles

Debit

Credit

The received short-term loan in foreign currency was credited to the current foreign currency account (150,000 USD x 30.50 rubles/USD)

Foreign currency funds were debited from the current foreign currency account upon repayment of the loan (150,000 USD x 30.70 rubles/USD)

A positive exchange rate difference is reflected between the ruble valuation of loan liabilities at the Bank of Russia exchange rate as of the loan repayment date and their ruble valuation at the Bank of Russia exchange rate as of the date of the last revaluation

The rules for the formation in accounting of information on the costs associated with the fulfillment of obligations on loans and credits received are given in PBU 15/01, in accordance with paragraph 2 of which to interest-free loan agreements and agreements government loan these rules do not apply.

Interest for the use of the provided foreign exchange funds is accrued monthly from the moment the foreign currency is credited to the account of the organization in accordance with the procedure established by the agreement. The amount of interest increases the principal loan obligation.

The fulfillment by the organization of obligations to pay interest must be carried out within the time limits established by the agreement. If such terms are not defined, then interest is paid monthly until the day of repayment of the loan amount.

Indebtedness on outstanding credits and loans is shown in the accounting records taking into account the interest payable in accordance with the terms of the agreements at the end of the reporting period.

Accrued interest is taken into account in ruble terms at the rate of the Bank of Russia in effect on the date of their recognition, and in its absence, at the rate agreed by the parties to the transaction. The procedure for recalculating interest debt is similar to the procedure established for the principal debt.

Therefore, the exchange rate difference is determined at each revaluation of unpaid interest on credit obligations in foreign currency on the reporting date, as well as on the date of fulfillment of obligations to pay them.

The basis for terminating the accrual in accounting of exchange rate differences arising from the revaluation of the balance of funds in settlements of credit and loan obligations in foreign currency is the termination of obligations under this loan agreement.

Exchange differences under a loan agreement, in which obligations to the creditor are expressed in foreign currency, are not accrued from the moment (indicated in the text of the agreement) of the expiration of the loan agreement (which can be extended), if it provides that from this moment (date) obligations of the parties (lender and borrower) under the contract.

In the absence of the above condition in the text of the loan agreement, exchange differences are accrued until the moment (date) stipulated by the agreement when the parties fulfill their obligations to repay the entire amount of the loan (loan) and interest on it by the borrowing organization.

Exchange differences resulting from the recalculation of the amount of the principal debt under a loan agreement are recognized as non-operating income and expenses, while exchange differences arising from the revaluation of accrued interest are reflected in accordance with the procedure provided for the recognition of costs for servicing loans.

The costs of loans and credits received are expenses of the period in which they are incurred and are related to operating expenses, with the exception of their part to be included in the cost of an investment asset - an object of property, the preparation of which for the intended use requires a significant amount of time.

Borrowing and credit costs are included in current expenses in the amount of payments due in accordance with the terms of the concluded agreements, regardless of the form and when the above payments are actually made.

Accrued interest on loans and borrowings attributable to operating expenses are reflected in the accounting records of the borrowing organization on account 91 "Other income and expenses", sub-account "Other expenses" (91-2)

Note!

Debt on received loans and credits is shown taking into account interest payable at the end of the reporting period according to the terms of the contracts.

In the accounting of the organization, the amounts of accrued interest for the use of borrowed funds are reflected in the credit of accounts 66 “Settlements on short-term loans and borrowings” and 67 “Settlements on long-term loans and loans” in correspondence with the debit of account 91 “Other income and expenses”. It should be noted, however, that the amount of accrued interest is taken into account apart.

Payment of accrued interest reduces accounts payable on borrowed funds received.

Example 5

On March 10, 2006, the bank granted a loan in the amount of 1,000,000 rubles to the manufacturing enterprise Tekhnika LLC for a period of 3 months at 24% per annum. In accordance with the terms of the loan agreement, the organization is obliged to pay interest to the bank on a monthly basis for using the loan no later than the 5th day of the next month.

The total amount of interest to be paid by Technika LLC for the use of the provided loan will be:

1,000,000 rubles x 24: (366 x 100) x 93 days = 60,983.61 rubles;

In the accounting of Tekhnika LLC, transactions with borrowed funds were reflected as follows:

Account correspondence

Amount, rubles

Debit

Credit

51 "Settlement account"

Loan amount received

The amount of interest on the loan for March 2005 was accrued (1,000,000 rubles x 24: (366 x 100) x 22 days)

Therefore, if the terms of the agreement do not determine the monthly calculation of interest, then in accordance with clause 18 of PBU 15/01, the borrower organization must still calculate interest evenly (on a monthly basis).

Advice: provide for monthly accrual of interest in contracts, otherwise possible deviations may appear in accounting when reflecting interest accrued in accordance with the terms of the contract and accrued monthly.

Since the accounting standard allows interest to be calculated in two possible ways, the organization must choose any of the options and fix this provision in its accounting policy.

Let us give an example from the consulting practice of BKR-Intercom-Audit CJSC on the recognition of interest on a loan used for the construction of a residential building.

Example 6

Question:

A commercial organization (CJSC) received a loan in the amount of 10 million rubles. at 6% per annum from another commercial company. The loan agreement does not specify for what specific purposes it is issued.

5 working days after the receipt of the borrowed funds, the CJSC sent an amount of 9.5 million rubles. to invest in the construction of a residential building. There were no other receipts to the current account of the CJSC during this period.

Question: For accounting purposes, should the accrued interest on a loan be included in the value of the investment asset (and in what part - in full or in proportion to the share of payment under the investment agreement) or should the amount of interest be attributed to operating expenses?

Answer:

The rules for the formation of information on fixed assets of an organization in accounting, including the rules for the formation of the initial cost of a fixed asset, establishes the accounting regulation "Accounting for fixed assets" PBU 6/01, approved by order of the Ministry of Finance of the Russian Federation dated March 30, 2001 No. 26n (hereinafter PBU 6/01).

The actual costs that form the initial cost of fixed assets include interest accrued before the acceptance of an item of fixed assets for accounting on borrowed funds, if they are involved in the acquisition, construction or manufacture of this item.

However, the provisions of PBU 15/01 provide for two options for classifying interest on a loan as an expense.

In general, the costs of loans and credits received, directly related to the acquisition and (or) construction of an investment asset, should be included in the cost of this asset and repaid through depreciation (paragraph 23 of PBU 15/01).

The costs of received loans and credits related to the formation of an investment asset, for which, according to the accounting rules, depreciation is not charged, are not included in the cost of such an asset, but are charged to the current expenses of the organization in the generally established manner. Since depreciation is not charged for housing stock objects (paragraph 17 of PBU 6/01), interest on a loan used to build a residential building does not apply to costs included in the initial cost of the fixed asset. These percentages are operating expenses of the organization and are subject to inclusion in the financial result of the organization.

Assessing the ratio of the norms of PBU 6/01 and PBU 15/01 from the standpoint of the theory of law, we can conclude that the norms of PBU 6/01 are general, as they regulate the formation of the initial cost of any fixed assets. The norms of PBU 15/01 are special, since they deal with the accounting of expenses on loans and credits for specific type property that is not subject to depreciation. Thus, it seems to us that in the case under consideration one should be guided by the norms of PBU 15/01, which are special in relation to the norms of PBU 6/01.

In the light of the above, it can be concluded that the entire amount of accrued interest on the received loan is included in the operating expenses of the reporting period of their recognition.

During the oral discussion, it was found out that the object under construction - a residential building can be intended for resale, and accordingly, after the transfer of ownership to CJSC, the apartments will not be put into operation as fixed assets, but included in the composition of goods. However, at the time of investing funds in the construction, the CJSC does not unequivocally determine the purpose of the property.

Because general principle recognition of costs for loans and credits received under PBU 15/01 is that these costs should be recognized as current expenses, we focus on the exception. A special procedure has been established for the portion of borrowing costs that is to be included in the cost of an investment asset. Also, if the organization uses the funds received from loans and credits to pre-pay for inventories, other valuables, works, services or to issue advances and deposits on account of their payment.

The concept of an investment asset is defined as an object of property, the preparation of which for the intended use requires a significant amount of time. Items purchased directly for resale are excluded from this category. Since an organization cannot qualify an object under construction as intended directly for sale, it is unlawful to exclude a house under construction from the category of an investment asset.

It is also unreasonable to regard investments in the construction of a residential building as an advance payment for commodity material assets, since at the construction stage the organization does not have sufficient grounds to qualify the future object as a commodity.

Therefore, in relation to interest on a loan received, the rules for accounting for expenses on loans aimed at acquiring an investment asset should be applied. As noted above, in general, the costs of loans and credits directly related to the acquisition or construction of an investment asset should be included in the cost of this asset and repaid through depreciation. The rules of paragraph 23 of PBU 15/01 regarding the inclusion of interest in the cost of an investment asset, first of all, aim to comply with the principle of uniform inclusion of expenses in the cost of sales.

In relation to fixed assets, for which depreciation is not charged, the cost of the object does not participate in the formation of the cost of sales. Therefore, the cost in the form of interest on a loan directed to the acquisition of an object is recognized by the organization as operating expenses at the time of their accrual.

Upon completion of construction, the object can be qualified as a commodity. The cost of goods sold forms the costs of the organization at the time of sale. Based on the rules of PBU 5/01, the cost of goods consists of the actual costs of their acquisition, including accrued interest on borrowed funds before the accounting of inventories, if they are involved in the acquisition of these stocks. Based on this, it can be concluded that the amount of interest on a loan allocated for the construction of a construction object affects the financial result from the sale of this object in the future. Therefore, the cost of goods, formed without taking into account the amount of accrued interest, will affect the size of the profitability of transactions for the purchase and sale of apartments, which may affect the decisions of users of financial statements.

At the same time, it should be borne in mind that financial statements are prepared according to certain rules, taking into account the materiality indicator. It is necessary to declare what value of the indicator will be accepted as significant in the accounting policy. Paragraph 11 of PBU 1/98 establishes that the organization must disclose the methods of accounting adopted in the formation of accounting policies that significantly affect the assessment and decision-making by interested users of financial statements. Methods of accounting are recognized as essential, without knowledge, about the application of which by interested users of financial statements a reliable assessment is impossible. financial position, cash flow or financial performance of the organization. Accounting methods include, in particular, methods for evaluating goods and recognizing profits from the sale of goods.

Deciding by an organization whether this indicator significant, depends on the assessment of the indicator, its nature, the specific circumstances of occurrence. The organization can decide when, for the formation of the actual cost of goods, an amount is recognized as significant, the ratio of which to the cost this product is at least 10 percent. Since the loan was received at 6% per annum, when construction is carried out for no more than a year, the amount of interest will not exceed the materiality limit.

Therefore, interest on a loan used to construct a residential building may be recognized as operating expenses on the date it accrues. If the organization is sure that the amount of interest accrued on the loan will exceed the materiality level, then we recommend using the account to accumulate the costs of servicing the loan and evenly include it in expenses as the apartments are sold.

The fact is that today there is a different procedure for accounting for these differences in received borrowed funds. Differences relating to interest are operating expenses, and differences arising from the assessment of borrowed funds (on the principal amount of the debt) in accordance with the norms of accounting legislation are classified as non-operating expenses. But the return of the principal amount of the debt is not considered an expense. How to be in such a situation?

Example 7

Let's assume that Raduga LLC received on March 12, 2006 from Katyusha CJSC a loan, the cost of which is expressed in conventional monetary units. The amount of borrowed funds is equivalent to 5,000 euros. Borrowed funds are provided for a period of 1 month at 40% per annum.

The euro exchange rate is taken conditionally and is:

51 "Settlement account"

The amount of borrowed funds was returned (5,000 c.u. X 34.70 rubles)

As you can see, as a result, the amount of 1,000 rubles (173,500 rubles - 172,500 rubles) remained on the account, which actually represents the amount difference that has arisen.

End of example.

For more information on the issues of accounting for transactions with borrowed funds from a borrowing organization, you can find in the book of CJSC “BKR-Intercom-Audit” “Borrowed and credit funds. Pledge and surety.

This is the only absolutely legal way to pay off the budget on time, without waiting for the full
payment in order to level the difference in time between the fact of shipment of the goods, which entails the formation
tax base, and receiving funds from the buyer, at the expense of which the debt to the budget is extinguished.

Based on the total amount of all taxes paid by the enterprise, by transferring VAT in full, you can
wait for the fact of payment for the goods by the buyer for quite a long time. This happens because
the increased VAT base in the amount of the total tax burden on the enterprise in this tax period is compensated
reduction in the income tax base in the same period.
The best source of borrowed funds is bank financing, for example
an ordinary loan or an overdraft, more acceptable in this case, which is convenient in that in cases where
there is a need, there is no need to draw up a separate loan agreement.
The possibility of providing such loans is usually stipulated by the bank in a standard client agreement for
settlement and cash services. Overdraft does not require collateral. It is provided within the specified limits.
automatically, if the funds on the client's current account are not enough to complete the transaction on
payment order.
The size of the credit limit for an overdraft directly depends on the size of the average monthly receipts of funds for
the client's current account, as well as the stability and frequency of such receipts. Indirectly on the size
the limit is affected by the duration of service of this client in the bank and the degree of trust of the financial institution
towards him.

If the amount of VAT owed resulting from any transaction is so large that it exceeds
overdraft limit, you can use a financial service such as factoring, or assignment of rights
requirements.
The essence of the factoring operation is as follows:
the seller of goods, works or services cedes, and the bank or other financial intermediary receives the right to claim
counter obligations arising from the buyer of goods, works or services, and in return the bank provides
the seller financing in the required amount.
The classic factoring operation can be regarded as a speculative acquisition of a receivable
indebtedness, with the financial intermediary usually making a profit in the form of a discount.
Sometimes the assignment of the right of claim is formalized as a pledge transaction, and the financing provided to the seller, in
In this case, it is an ordinary loan. The convenience of factoring operations is that you can
quickly receive not only funds to pay off debt to the budget, but also almost complete
the value (net of the profit of the financial intermediary) of goods sold, without waiting for the timing of their actual
payment by the buyer.

Financial structure of capital (ratio of equity and debt capital (balance sheet liabilities items))

Shareholder Value Management Metrics

The DCS report contains information that supplements the data of the balance sheet and the income statement in terms of determining the cash inflow necessary to carry out the planned volume of financial and business operations.

In order to obtain information about the status of settlements in national economy, starting with the report for 9 months of 1995, a section on VAT was introduced into the Russian practice of compiling financial statements. It reflects the main ways of receiving funds and the direction of their spending.

Most common in financial analysis is a DDS report form, consisting of three parts:

1. Cash flows from the main (production) activities.

2. Cash flows from investment activities.

3. Cash flows from financial activities.

From the point of view of shareholders, shareholder value is the cost of realizing their investment. For joint-stock companies this is primarily the return on shares, that is, the share price, taking into account dividends

Financial indicators shareholder value estimates can be conditionally divided into:

Traditional (based on generally accepted financial accounting data)

Indicators that meet the principle of cost management.

Indicators:

- sales growth and market share

- coefficients of net present value and internal rate of return

- earnings per share

- economic value added= profit from operating activities after taxes minus (cost of capital, %) x ( overall size capital)

- rate of return on invested capital based on cash flow

- market value added= volume market capitalization minus ( equity+ borrowed funds)

One of the main tasks financial management, along with the agreement cash flows, the development of the investment budget, is the optimization of costs for attracting financial resources, optimization of the financial structure of capital.

Financial structure of capital- this is the structure of the main sources of funds, the ratio of equity and debt capital.

1. Equity and reserves include invested capital and accumulated profit:

Invested capital is capital invested by the owner (authorized capital, Extra capital, earmarked revenues and funding);


Accumulated profit is the profit, net of taxes and dividends, that the company has earned in the previous and current period (retained earnings, Reserve capital, various funds).

The invested capital and the accumulated profit constitute equity capital.

2. Obligations of the enterprise:

Long-term liabilities are loans and borrowings with a maturity of more than 1 year;

short-term liabilities are liabilities with a maturity of less than 1 year (for example, short-term loans and loans, accounts payable).

the ratio of the company's total liabilities and long-term borrowings to equity.

  • Glossary of business terms

  • - the percentage per annum on a debt instrument at the time of its maturity ...

    Financial vocabulary

  • - the ratio of the profit received by the enterprise for the period to the average level of own funds. In English: Return on net assets Synonyms: Return on equity See also: ...

    Financial vocabulary

  • - the percentage of the amount of borrowed funds, multiplied by the period of their use. In English: Cost of loanSm. See also: Enterprise cash Loan capital  ...

    Financial vocabulary

  • - see INCREASED PROFIT...

    Big Economic Dictionary

  • - raising capital by issuing bonds or obtaining loans ...

    Big Economic Dictionary

  • - a market in which medium-term and long-term financing operations are carried out, in contrast to the money market, where predominantly short-term financing operations are performed ...

    Economic dictionary

  • - the ratio of the company's own working capital to total value own funds...

    Glossary of business terms

  • - medium and long-term financing market...

    Glossary of business terms

  • - is formed in associations, enterprises, the size of working capital of which exceeds the constant minimum production needs for resources ...

    Big Economic Dictionary

  • - heavy financial condition enterprises, firms, which consists in the lack of money to acquire the necessary working capital, settlements with suppliers, payment of wages ...

    Big Economic Dictionary

  • - the ratio of total liabilities and long-term borrowings of the company to equity capital; an increase in debt tends to exacerbate the volatility of a company's earnings per share...

    Big Economic Dictionary

  • - payments from the funds at the disposal of the enterprise ...

    Big accounting dictionary

  • - the difficult financial condition of the enterprise, which consists in the lack of money for the acquisition of the necessary working capital, settlements with suppliers, payment of wages ...

    Encyclopedic Dictionary of Economics and Law

  • - a market in which medium-term and long-term financing operations are carried out - in contrast to the money market, where predominantly short-term financing operations are performed ...

    Encyclopedic Dictionary of Economics and Law

"Equity to Debt Ratio" in books

117. Composition and structure of borrowed funds of enterprises. The role of a bank loan in the composition of borrowed funds. Organization and principles of lending. The procedure for issuing loans on loan accounts. Interest rates for using a bank loan. Methods for assessing the creditworthiness of customers by banks

author Shevchuk Denis Alexandrovich

117. Composition and structure of borrowed funds of enterprises. The role of a bank loan in the composition of borrowed funds. Organization and principles of lending. The procedure for issuing loans on loan accounts. Interest rates for using a bank loan. Assessment Methods

120. Leasing is a specific form of borrowed funds. Loans of legal entities and individuals, their features

From the book Finance and Credit author Shevchuk Denis Alexandrovich

120. Leasing - specific form borrowed money. Loans of legal and individuals, their features Today, many Russian enterprises experience difficulties associated with attracting long-term financial resources for the purchase of fixed assets, as well as with

18. Checking the correctness of the calculation of the bank's own funds.

From the book Bank Audit author Shevchuk Denis Alexandrovich

18. Checking the correctness of the calculation of the bank's own funds. During the audit, the auditor must confirm the accuracy of the amounts included in the calculation of capital, the legitimacy of their attribution to the sources of the main and additional capital, compliance with the established structure

6.3. PAYMENT FOR GOODS BY THE EMPLOYEES OF THE ORGANIZATION AT THE OWN MONEY

author

6.3. PAYMENT FOR GOODS BY EMPLOYEES OF THE ORGANIZATION AT THE OWN MONEY Often, in an organization that uses a simplified taxation system, a situation arises when an employee pays for the purchase of goods, works, services for the organization at his own expense.

Expenses for repair of own fixed assets

From the book How to use "simplified" author Kurbangaleeva Oksana Alekseevna

Expenses for the repair of own fixed assets Expenses for the repair of fixed assets in accordance with sub. 3 p. 1 art. 346.16 of the Tax Code of the Russian Federation reduce the tax base for single tax organizations. These costs are taken into account at a time in the reporting period when the repaired

From the book Finance of Organizations. cheat sheets author Zaritsky Alexander Evgenievich

30. Borrowed capital and sources of its formation. Grade economic feasibility attraction of borrowed funds Borrowed capital is a set of borrowed funds and material assets that are advanced into the activities of an enterprise in order to

34. Analysis of the bank's own funds

From the book Banking. cheat sheets author Kanovskaya Maria Borisovna

34. Analysis of the bank's own funds Own funds of a commercial bank are funds owned by the bank itself. The structure of own funds can be represented as follows.1. Capital and funds of the bank: authorized capital; own shares purchased from

Accounting for interest in case of misuse of borrowed funds

From the book Organization Expenses: Accounting and Tax Accounting author Utkina Svetlana Anatolievna

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The capital of the enterprise can be considered from several points of view. First of all, it is useful to distinguish real capital, i.e. existing in the form , and money capital, i.e. existing in the form of money and used to acquire the means of production, as a set of sources of funds to ensure economic activity enterprises. Consider first money capital.

Equity and debt capital

Funds that ensure the activities of the enterprise are usually divided into own and borrowed.

Equity enterprise represents the value (monetary value), wholly owned by him.

In accounting, the value of equity is calculated as the difference between the value of all property on the balance sheet, or assets, including amounts unclaimed from various debtors of the enterprise, and all the obligations of the enterprise at a given time.

The company's equity capital is made up of various sources: authorized, or share, capital, various contributions and donations, profits that directly depend on the results of the enterprise. A special role belongs authorized capital, which will be discussed in more detail below.

Borrowed capital- this is the capital that is attracted by the enterprise from the outside in the form of loans, financial assistance, amounts received on collateral, and other external sources for a specific period, under certain conditions under any guarantees.

Fixed and working capital

Capital in material incarnation is divided into and.

To fixed capital include material factors of durable use, such as buildings, structures, machinery, equipment, etc.

Working capital spent on the purchase of funds for each production cycle (raw materials, fixed and auxiliary materials etc.), as well as on .

Fixed capital serves for a number of years, while circulating capital is completely consumed during one production cycle.

Fixed capital in most cases is identified with fixed assets (fixed assets) of the enterprise. However, the concept of fixed capital is broader, since in addition to fixed assets (buildings, structures, machinery and equipment), which represent a significant part of it, fixed capital also includes construction in progress and long-term investments - funds aimed at increasing capital stock.

Financial capital structure and financial risk

Any financial and economic activity requires a constant investment of capital. To maintain and expand production process and improving its efficiency, introducing new technologies and developing new markets, direct investment is needed (). One of the main tasks of financial management, along with the coordination and development of the investment budget, is the optimization of costs for attracting financial resources, optimization of the capital structure.

The choice of sources of financing depends on many factors, including the industry and the scale of the enterprise, technological features, specificity of products, character state regulation and business taxation, relations with banking structures, reputation in the market, etc.

Capital structure used by the enterprise, determines many aspects of not only financial, but also operating and investment activities, has an active impact on the final result of this activity. It affects the return on assets and equity, financial stability and liquidity ratios, forms the ratio of profitability and risk in the process of enterprise development.

financial structure capital is the structure of the main sources of funds, i.e., the ratio of equity and debt capital.

The financial capital of the enterprise consists of own and borrowed.

Equity

Equity and reserves include invested capital and accumulated .

Invested capital is the capital invested by the owner ( , targeted revenues). Own capital of the enterprise - retained earnings, various funds.

Accumulated profit- this is the profit, net of taxes and dividends, that the company has earned in the previous and current period.

Borrowed capital (obligations of the enterprise)

Borrowed capital in the capital structure of an enterprise consists of short- and long-term liabilities.

long term duties These are loans and borrowings with a maturity of more than a year.

Short-term liabilities- these are liabilities with a maturity of less than 1 year (for example, short-term loans and borrowings, accounts payable).

Differences between own and borrowed capital of an enterprise

Type of capital in the capital structure of the enterprise

Own

Borrowed

Direct right to participate in the management of the enterprise

Gives that right

Does not give
such a right

Attitude to financial risk

Increasing the share of equity reduces financial risk

Increasing leverage increases financial risk

Right to Profit

According to the residual

Priority

The order of satisfaction of claims in bankruptcy

According to the residual

Priority

Terms and conditions of payment and return of capital

Definitely not installed.

Clearly defined by the loan agreement

Main direction of financing

Long term assets

Current assets
Reducing income tax by attributing financial costs to costs There is no such possibility This possibility exists
Internal and external sources External funding sources (excluding )
Relationship between the income of the owner of capital and the profitability of the enterprise The income of the owner of the capital is directly related to the financial result The income of the owner of the capital is not related to the financial result

World practice shows that the most "cheap" source is debt financing, since creditors are in a more privileged position in comparison with the owners of the enterprise. They retain the right to return their investments, and in the event of bankruptcy, their claims will be satisfied before the claims of shareholders. Nevertheless, the uncontrolled growth of debt financing can significantly reduce the financial stability of an enterprise, cause a drop in the market price of its shares, and in the event of an unfavorable development of events, put the enterprise at risk of bankruptcy.

The coefficients for assessing the financial stability of the enterprise are as follows:

1. Equity concentration ratio

where K c - equity; K - total (own and borrowed) capital; K ksk - the share of equity in the financial structure of capital.

To maintain financial stability, K csk should be at least 60% (K csk ≥ 60%).

2. Coefficient of financial dependence

where K z - borrowed capital; K with - own capital; To fz - characterizes the financial dependence of the enterprise on external loans.

The higher K fz, the higher financial dependence worse financial stability enterprises.

The financial stability of an enterprise is associated with the concept "price of capital".

Price (cost) of capital- this is the total amount of funds that must be paid for the use of a certain amount of financial resources, expressed as a percentage of this volume.

The price of capital characterizes:

  • the level of price that the enterprise must pay to the owners
  • rate of return on invested capital

Each source of funds has its price. Therefore, allocate indicator of the weighted average price of capital.

The price of the sources of attracted funds is calculated as a percentage of the attracted funds. Knowing the prices of individual sources and their share in total amount advanced capital, it is possible to determine weighted average price of capital:

where C to - the price of the capital of the enterprise; j is the number of sources of funds; C j - the price of each source; q j is the share of sources in the total amount of capital.

financial risk

The assessment of the financial structure of capital is inextricably linked with the calculation financial risk.

Calculation effect of financial leverage gives a quantitative assessment of financial risk.

financial risk is a complex concept that includes the probability of:

  • loss of profit due to excessive amounts of borrowed capital;
  • late payment of interest and principal.

Methods for calculating financial leverage:

Imethod:

where SNP is the income tax rate; ER - economic profitability; To z - borrowed capital; K with - own capital; SRSP - the average calculated interest rate; EFR is the effect of financial leverage (possible increment to the profitability of own funds associated with the use of borrowed funds).

If SRSP< ЭР, то у предприятия, использующего заемные средства, рентабельность собственных средств возрастет на ЭФР.

If SRSP > ER, then the return on equity of an enterprise that takes a loan will be lower than that of an enterprise that does not.