LEGAL REGULATION OF ACCOUNTING OF FINANCIAL ASSETS AS A COMPONENT OF FINANCIAL INSTRUMENTS IN CONSTRUCTION

Abstract

The article examines the Ukrainian and international legal framework regarding financial instruments and the peculiarities of their application in accounting. A significant amount of legislative and regulatory framework in the construction industry and its constant changes present new challenges to the accountant of a construction company. As a result, it doesn’t always timely and correctly make changes to the current system of accounting and reporting in a specific enterprise, for which he may be threatened with fines, penalties, penalties or additional loss of funds, working time. Special importance in this process should be given to financial resources regulated by national and international accounting standards. The views of scientists regarding the problematic issues of financial instruments and ways of solving them, in particular regarding: inaccuracies of laws, high financial risks in construction, insufficient stimulation by the state for the development of management accounting, military actions in the country, socio-cultural factors has been analyzed. The current political situation in Ukraine regarding residential construction objects is taken into account and the reasons for the increase in prices for new buildings in 19 regions of Ukraine has been discovered. First of all, it’s connected with the internal migration of the population and the formation of the future price per square meter of future construction objects (taking into account inflation).The relationship between financial assets and other financial instruments, in particular: financial liabilities, equity instruments, derivative financial instruments has been studied. At the same time, the legislative framework regarding financial instruments, such as: NP(S)BO 13 «Financial instruments»; IAS 39 «Financial Instruments: Presentation»; IFRS 9 «Financial Instruments» has been taken into account. A number of shortcomings related to the ambiguous interpretation of certain terms and a certain inconsistency of the current standards with the requirements of accounting and financial reporting has been revealed. The peculiarities and shortcomings of the regulatory framework regarding Construction Financing Funds (FFFs), Real Estate Operations Funds (FFOs), and Joint Investment Institutions based on such laws has been carried out. It was found that each of them has it’s own peculiarities regarding documentation, schedules of construction financing, reserving funds, which affect the quality of financial and management accounting. Improvement of the accounting policy in terms of financial instruments for construction enterprises has been proposed. Such an algorithm includes: 1) the choice of methods of conducting calculations; 2) definition of financial instruments and methods of their evaluation; 3) selection of a contract at a fixed price and a contract at a «cost plus» price; 4) designing the working plan of accounts; 5) drawing up a list of working financial documents; 6) definition of a set of items in financial statements that are convenient for the enterprise; 7) preparation of a plan for development, improvement and coordination of forms and a list of indicators of management reporting of a construction enterprise.