What is a financial liability? Is it good that they are, or is it bad? How are they formed? How are they recorded and implemented?
general information
Initially, let's decide what financial liabilities are. This is the result of a contractual relationship, which provides for the payment of funds or the transfer of other assets to organizations. This also includes the exchange of financial instruments on potentially unfavorable conditions.
But here you must be careful. After all, such instruments as stock options and other obligations to transfer own equity holdings are not obligations. What else? Financial liabilities are payables that have arisen to contractors and suppliers under loan agreements (including on accepted bills of exchange, bonds, guarantees, and avatals).
About accounting
Of greatest interest is an inventory of financial liabilities. In essence, this is a check by counting, measuring and weighing. This is an effective way to clarify accounting indicators and monitor the safety of property. An inventory of financial obligations allows you to identify the actually present assets, compare them with the data of the documents and make sure that all the working moments are fully reflected.
What is taken into account? Accounting for financial obligations involves an inventory of fixed assets, investments, intangible assets, inventories, finished goods, goods, cash, other inventories, as well as consideration and verification of payables, loans and reserves. In addition, attention is paid to the types of property, which, although not owned by the organization, are displayed in its documentation.
When it is necessary?
There are a number of indications. You can select planned (for example, in the fourth quarter of the year) or initiated (when the sale is planned). In any case, a financial liability is an important component of economic activity, so you need to be well informed about its size and timing.
It should be noted that many aspects of verification are described in the eleventh article of Law No. 402-FZ. General cases, terms, and the procedure for their implementation are considered there. In addition, No. 402- contains a list of objects that are subject to inspection. But to complete the picture it is necessary to understand that this is all regulated not only by the legislation of the Russian Federation, but also by a number of industry and federal standards.
Talk about fulfilling financial obligations
When the parties enter into an agreement, they seek to achieve a specific goal. This may be a profit, sale or purchase of goods and the like. As practice shows, the agreements reached are not always implemented. Also, a situation often arises when certain shortcomings were recorded, which, of course, affects the achievement of the agreed goal and / or the quality of the result. And this raises the question of financial liability. This is necessary to ensure compliance with the agreements reached. First of all, the interests of the person who has the right to claim, that is, the creditor, are protected. In some cases, a third party may be involved, for example, under a guarantee and a bank guarantee.
What forms can execution take?
It should be noted that a financial liability is a collective name for various instruments. What should be highlighted first?
- Forfeit. This means a certain amount agreed upon by the contract or the law, which must be paid in case of non-fulfillment or improper fulfillment of obligations. A particular example is the case of delay. The convenience of this approach is that the lender does not need to prove the fact of causing losses, to establish their size, causality and other bureaucratic issues.
- Pledge. This is a way to ensure the financial obligations of the organization when the creditor, in case of failure to fulfill an agreement by the debtor, can receive compensation from certain assets. A pledge must be fixed in such status in writing and transferred within the framework of the law, otherwise all manipulations with it may be invalidated.
- Retention. The essence of this approach is that the creditor is vested with the right to the thing that must be transferred to the debtor, in case of failure to fulfill its obligations, to realize, reimbursing the costs and other losses.
- Deposit. This is the name of a certain amount of money, which is issued by one of the parties as evidence of the conclusion of the contract, as well as as ensuring its performance. Regardless of the size of the deposit must be made in writing. At the same time, it performs certification, security and payment functions.
- Surety. In this case, a third party is involved who undertakes to answer to the creditor for the implementation of the agreements.
- Bank guarantee. Its essence is like a guarantee. But its peculiarity lies in the specific composition of the subjects and ignoring the claims and objections of the principal to the beneficiary.
Short term interaction
Speaking about the formation of financial obligations, this aspect cannot be ignored. Short-term interaction is understood as borrowing for a period of less than one year. This can be loans, additional funds, advances, bills, debts to staff. As a rule, they are used to form additional financial resources or to go through a difficult period. So, money can be used to solve primary tasks, including a sudden plan.
For a number of signs, they can be classified as:
- Operational liabilities. These are advances received by the company, rents, taxes, debts on received goods or materials, already accrued salaries for staff and managers.
- Short-term liabilities. These include those that should be closed for one year from the moment the report was prepared, where they are listed. As an example, we can cite the company's debts on its fixed assets, as well as a part of long-term liabilities that must be repaid within a certain period.
- The funds necessary to ensure the company's spending in the coming year after the preparation of the report in which they are listed. An example is compensation for employees on vacation, accrual of bonuses, as well as other expenses.
Why are they formed by enterprises?
In many cases, effective financial activity is not possible without borrowing funds. After all, they allow you to significantly expand the volume of economic activity, ensure the effective use of equity, accelerate the formation of trust funds and increase the market value of the subject of economic activity.
In order not to miscalculate, you can use the following algorithm:
- Conduct an analysis of borrowing in the previous period to determine the volume, composition and form.
- Define specific goals for which it is planned to take money.
- Work out the size of the limit volume.
- Estimate the cost of borrowing from several different sources.
- Determine the ratio of funds to be taken on a long and short term basis.
- Deal with the form of attraction.
- Determine the composition of the main lenders.
- Form an effective environment.
- Ensure the effective use of borrowed funds.
- Work out calculations on loans.
Conclusion
So we examined what financial obligations are, when they are needed, what forms they can take and why enterprises should work with them. For almost every sentence in this article, you can write a separate article, but to understand this issue, the information presented here should be more than enough.