№ 11/2022

Fìnansi Ukr. 2022 (11): 64–78https://doi.org/10.33763/finukr2022.11.064

SCIENTIFIC CONFERENCES

OZERAN Alla ¹, KORSHYKOVA Renata ²

¹Kyiv National Economic University named after Vadym Hetman
OrcID ID : https://orcid.org/0000-0002-9234-4593
²SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0002-1367-2450

Accounting for assets received free of charge in the context of state aid

Introduction. In the practice of state-owned enterprises, there are cases of receiving assets on a free basis. At the same time, such free receipts are made both from the government of Ukraine and from governmental and non-governmental bodies of other countries, including charitable organizations and foundations. In most cases, the free transfer of assets (property) is accompanied by the establishment of certain requirements for their further use. In the IFRS system, such transactions fall within the scope of IAS 20 “Accounting for Government Grants and Disclosure of Government Assistance”. However, the term “grant” is not used in the legal framework of Ukraine on accounting and financial reporting, and the method of accounting for assets received free of charge is not fully regulated.
Problem Statement. Improvement of the domestic regulatory framework in terms of harmonization of terminology both within the national standards themselves and with IFRS definitions.
Purpose. To harmonize the essence of the terms used in the domestic regulatory framework with IFRS, and in the absence of certain concepts, to propose their definition for the purpose of accounting, to improve the accounting of receipt of fixed assets by state enterprises on a free basis.
Methods. General scientific and special methods are used: comparison, analogy, grouping, elements of the accounting method.
Results. It is substantiated that the national regulatory framework creates a more universal policy regarding the enterprise's recognition of income from various types of targeted assistance provided to it compared to IAS 20. At the same time, the article proposes to supplement the categories of the NP(S)BO apparatus by defining the concepts of “targeted financing” and “targeted revenues” with clarification of their essence. The expansion of the categorical apparatus made it necessary to make editorial rights in separate regulatory documents, forms of financial reporting, including regarding the name of account 48 “Targeted financing and targeted revenues”. When reflecting operations of free acquisition of fixed assets, it is proposed to provide for the possibility of choosing one of two approaches: either the capital method, according to which, as the depreciation of the fixed asset is accrued, additional capital will be transferred to retained earnings or the income method, according to which the receipts of assets received free of charge are reflected in correspondence with account 48 “Targeted financing and targeted revenues”, which, as the depreciation of the fixed asset is calculated, decreases with the simultaneous recognition of income (account 74 “Other incomes”). This will ensure the harmonization of national approaches with the provisions of IAS 20.
Conclusions. Clarifying the essence of such concepts as grants and subsidies, targeted financing, identifying their common and negative features made it possible to clarify the categorical apparatus used in national regulatory acts and to harmonize it with the terms of IAS 20. The study specified the method of accounting for additional capital when reflecting operations of free acquisition of fixed assets by state enterprises. The proposed proposals are aimed at ensuring the harmonization of national approaches with the provisions of IAS 20.

Keywords:grant, state aid, subsidy, targeted funding, targeted revenues, fixed assets received free of charge

JEL: M40

Ozeran A. . Accounting for assets received free of charge in the context of state aid / A. Ozeran, R. Korshykova // Фінанси України. - 2022. - № 11. - C. 64-78.

Article original in Ukrainian (pp. 64 - 78)

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