Capital investments: new rules of financing

Source: Journal “Institutions of physical culture and sports: accounting and taxation”

The regulatory framework defining the features of capital investments in state (municipal) property has been significantly updated since the beginning of 2014. Amendments to the Budget Code of the Russian Federation have come into force, a number of resolutions of the Government of the Russian Federation have been adopted, and changes have been made to other regulations governing the process of capital investments. What are the current conditions for receiving targeted funds for the construction and acquisition of real estate? What should physical education and sports institutions consider when spending these funds?

Types of government investments

Currently, there are the following options for investment receipts of resources from the state treasury:

• injections into physical assets, such as land, equipment, residential and non-residential buildings, etc.
• monetary government investments, in particular, in shares of enterprises.

The industry characteristic also distinguishes the classification of government investments into fixed assets of objects under construction:

• agricultural direction;
• production direction;
• construction of housing;
• social spheres (educational, healthcare, trade, cultural institutions, etc.);
• geological exploration;
• transport and communications enterprises.

Public investment to comply with the terms of fiscal management structures. This type of investment is in great demand when an enterprise is faced with the need to bring its activities into compliance with the conditions of the authorities regarding environmental standards, the safety of manufactured products and other production processes that cannot be guaranteed by simply improving management processes.

What are they and why are they needed?

Part of the monetary, material and other assets of the state that make up its budget constitutes public investment. Various funds belonging to other internal sources are also sent here.

Such cash injections help enterprises stay afloat, develop and maintain the economic power of the country, and solve social problems.

Countries are the largest corporations with huge financial assets, which are formed by borrowed and budgetary capital, and funds from extra-budgetary funds. The investment of this money in the domestic and foreign economy is called public investment activity.

What is the state investment policy based on?

Public investment is financed by taxes levied and net profits received by national companies and enterprises. To attract them, the government is developing targeted programs and projects that make it possible to receive a grant for the implementation of any activity.

Areas of public investment

Government investment is a necessary measure, especially in times of decline and financial instability.

Budgetary investments are needed for the development of all spheres of the country’s life, regardless of whether they have commercial interest or not.

The main characteristics of the state are the safety of life of its citizens, the development of the social sphere and economic well-being.

Accordingly, the most significant areas of public investment:

1. environment protection
2. development of the country’s scientific potential (development of education to train qualified specialists, advanced training of existing workers, creation of scientific centers for the development of new technologies, etc.)
3. creating a prosperous social and cultural environment for citizens
4. maintaining the defense capability of the state and the safety of its residents at the proper level
5. ensuring sufficient levels of housing construction and infrastructure projects.

Public investment is, in essence, government spending on creating and maintaining the economic power of the country. It can be:

• capital investments in real estate, land, intangible assets.
• loans to individuals, organizations and government agencies for the implementation and development of private projects.
• investments in securities, shares and shares in various funds.
• transfers to departments and ministries for the implementation of government projects.

Any investment activity, even government, must be subject to some kind of plan. This means that a sound investment policy must be developed.

Public investment policy must include measures to improve the investment climate, increase investment attractiveness, increase investment activity and stimulate the efficiency of investments made within the country.

Characteristics and signs

Distinctive features of public investment: these are large amounts of investment required to launch an approved project. GIs have a certain cyclicity.

As a rule, these are open systems implemented by customers/developers and other counterparties (designers, contractors, banks, material suppliers, etc.). Assets are attracted to the real sector of the economy and allocated for specific purposes.

Conditions for receiving injections from the state treasury

Receiving resources from the state budget is possible only if the following documents are present:

• project documentation;
• technological and economic justification for a specific plan for spending fiscal money;
• agreements between the customer, represented by the state, and the performing organization;
• document regulating the process of transfer of real estate.

The circumstances for providing this type of capital investment to private and state-owned enterprises are outlined in Article 79. BK.

The issuance of government investments to companies in the private sector of the economy can only be made in the situation of a detailed justification of the business plan from both the technical and financial sides.

Budget financing from tax revenues

Up to 40% of the gross domestic product passes through the budget of developed countries. In Russia, the majority of budget revenues come from tax payments. They account for 84% of all receipts.

Taxes are gratuitous mandatory payments made by business entities through the alienation of part of their property in favor of the state.

Different types of taxes go to budgets of different levels. If there is a surplus of funding, funds can be distributed between budget levels in the form of subsidies.

The federal budget receives taxes from the real sector of the economy in the form of income taxes. This includes excise taxes on alcohol, alcoholic products, tobacco products, as well as cars, excise taxes on gasoline, and so on. The federal budget receives one hundred percent of the indirect tax on the sale of products and services. Mineral extraction tax is also assessed, including mandatory payments related to this activity. One hundred percent of the water tax goes to the federal budget. All mandatory payments related to the use of public services by citizens and business entities of the country are sent to the general state budget.

Regional budgets receive funds from income taxes, gambling, and transport. One hundred percent tax on the income of foreign citizens and eighty-five percent taxes on the income of residents of the country. Excise taxes on certain types of products, taxes on the extraction of minerals in the form of diamonds, and more.

Local budgets are mainly financed from the federal and regional budgets, as well as from state duties and direct tax deductions intended to finance them. These include land tax, advertising tax, gift and inheritance tax, and mandatory license fees.

Objects of fiscal investment and their effectiveness

The key recipients of monetary resources from the state treasury are:

• state-owned enterprises;
• municipal structures;
• private business;
• organizations that exist at the expense of the budget.

The state makes budgetary investments in them, resorting to state orders for this.

The object of the infusion of money from the state treasury belongs to the country, therefore budget investments increase the capital of these organizations, often by increasing the authorized capital of these institutions. These capital injections are implemented in accordance with the article “Budget investments”. In any case, the ownership of all investment objects from the state budget remains with the state in the amount of injections made. Thus, the government takes care of increasing national assets in the state budget.

A company that is not under fiscal ownership can also receive funds from the budget as public investment, i.e. private business.

Such state investment under the article “Budget investments to other legal entities” received the right to exist in connection with the desire of the state to participate in the processes of private entrepreneurship on a partnership basis. In situations where such a partnership is concluded, public investments turn out to be a share of the authorized capital of the newly created organization. In this case, government agencies receive the rights to manage the organized company and the opportunity to extract the resulting profit. The state can entrust the management of this company to some government agency at the municipal or regional level.

The selection of state investment objects for the Investment Fund of the Russian Federation is carried out by 3 structures: the investment one, then the state commission and ratified by the Government of the Russian Federation . Projects worth at least 5 billion rubles are allowed for discussion. The contribution of private capital in such projects is no less than 25% of the total money invested.

Projects are selected according to the following criteria:

• degree of importance to the interests of the country;
• feasibility from an economic point of view;
• efficiency for the interests of the state budget;
• financial profitability.

For each project, quantitative aspects are selected that correspond to the state of this industry and the significance of the object for the economy of the state.

Conditions and procedure for provision

The main goal of the investor is to extract maximum profit with minimal risks. An organization on the verge of bankruptcy, with unstable financial performance and low social significance will not receive budget investments.

The state puts forward some conditions for potential recipients of funds:

1. The project must have a clearly developed business plan.
2. The institution is required to provide a plan for the transfer of land and buildings.
3. Estimate and design documents must be drawn up by competent specialists, taking into account all possible force majeure circumstances.

A contract is concluded between the two parties, without which the investment injection is impossible.

The procedure for providing budget investments is regulated by Articles 79 and 80 of the Budget Code of the Russian Federation. Funds are allocated from the state treasury for the development of various types of enterprises. Free subsidies are possible only in cases where the recipient company is owned by the state or works with federal programs. Investments are made after placing a government order for the construction/reconstruction of the selected facility.

Capital investments depend on the level of decision making:

• federal level - injections into federal programs and property;
• regional level – municipal projects;
• targeted assistance – provision of guarantees and loans.

Sources of fiscal funds injections

There are key sources of capital for providing government investment. Of course, the federal treasury appears to be the key investor. Actually, all the finances required for subsequent investment are accumulated there. Other sources of resources:

• regional and municipal budgets;
• national banking institutions;
• national credit companies;
• national funds.

Sometimes private players who have their own interest in a profitable investment of finance also want to support certain government investment projects with finances. Then the investors sign corresponding contracts among themselves. In this situation, accounting is done in a slightly different way. If various authorities are involved in the financing of the project, then the enterprise reports to each of them individually. The legislation precisely establishes what exactly is called public investment and how it should be taken into account.

Independent players invest their resources in the project, guided by their own initiative, and their monetary resources are spent on achieving the goals and objectives of the capital investment project. When such a project turns out to be capable of generating profit in the future, the private investor is also recognized as an investor, and dividends are paid to him.

The accuracy of investment budget decisions depends on the accuracy of data regarding cash inflows and outflows.
Thus, incorrect conclusions regarding inflationary changes in the price level when budgeting capital investments can lead to errors in forecasting cash flows and, as a result, to making incorrect decisions. [p.374] Based on draft reports on financial results (operating budget), investments (investment budget) and cash flows (financial budget), as well as the balance sheet at the beginning of the budget period, a draft balance sheet is constructed at the end of the budget period. The general principles for calculating individual items of the draft balance sheet at the end of the budget period are shown in Diagram 10. [p.74]

As you know, even a good investment budget cannot serve as a guarantee of their high quality, i.e., budget preparation must certainly be followed by an investment analysis. For this purpose, the company's latest achievements in the field of financial, economic and investment analysis are used. Carrying out the analysis allows you to assess the financial and economic viability of an investment project, calculate various risks in its financing, and “play out” possible situations that may arise during its implementation. The analyst is given the opportunity to calculate an alternative to the proposed project, taking into account the requirements of the investor financing the project. [p.317]

The strategic planning complex forms the basis for the development of budgets that are more specific in terms of timing and content, which lays out the implementation of action programs provided for by development strategies. The main budgets are the investment budget, the income and expense budget, the forecast balance, and the cash flow budget. [p.41]

The internal use of information at the enterprise is intended for determining and analyzing the cost of products (works, services), drawing up estimates, budgets for the purpose of planning various types of activities, current operational reports of the responsibility center, evaluating work results, for analyzing investment budgets, for cost reports, for goals of long-term planning of various aspects of the enterprise. [p.183]

Our point of view regarding the formation of an investment budget and decision making [p.231]

Development of an investment budget for the project office [ [p.150]

The costs of research and development, which in certain cases may be very important for the future of the enterprise, deserve special consideration. In any case, these estimates are related to the investment budget. [p.36]

The company has a financing cost of 12%, and the investment budget for the year is limited to 12 million. Each project is divisible (i.e., if necessary, part of the project can be implemented). [p.188]

The company must formulate a policy for planning and approving the investment budget. The investment planning policy assumes that the authority to make investments is ensured for the entire capital investment budget; the budget includes provisions for approving volumes and investment schedules; cost control for individual enterprises is ensured. [p.104]

Here, GR is simply the probability of exhausting the investment budget as a result of drilling dry wells. [p.539]

The main budget documents of the parent company include the budget for the movement of means of payment, the investment budget, the credit budget, and the tax budget. [p.98]

Consolidated budget documents include V budget for the movement of means of payment, / investment budget, S credit budget, r- [p.99]

The main budget document of an oil company is the cash flow budget, which ensures the overall balance of revenues and expenses necessary to maintain liquidity in the activities of the main links of the vertically integrated chain. The budget for the movement of means of payment provides general information on the volumes of financing allocated in the budget for the main expenditure items of the company's activities. Due to the priority of issues of financing investments and tax payments, investment and tax budgets are formed separately, which ensure that the company’s own revenue sources are allocated to the corresponding expenditure items. In turn, the loan budget serves to compensate for the lack of the budget’s own funds by planning opportunities and sources for attracting external financing. [p.100]

Financing of investments must be made in accordance with the strategic goals of the company. It is in accordance with these objectives that the company decides which program to finance and approves the indicators proposed in the investment budget. Capital investment decisions must be consistent with the company's future cash flow, financial strategy, and growth performance. It is assessed whether the project provides greater revenues than the company's existing activities. Particular attention is required to sunk, unrecovered costs and fixed costs that cannot be changed after decisions have been made on the project. [p.136]

The goals of tax budget planning include the provision of revenue sources for tax payments provided for in the tax plan. Comprehensive planning of the investment budget and the borrowing budget is aimed at providing income sources for projects to develop the company's potential and obligations to repay and service borrowed funds. [p.144]

Investment budget Tax budget Credit budget [p.146]

TABLE 21 FORM OF INVESTMENT BUDGET [p.242]

TABLE 22 FORM OF INVESTMENT BUDGET OF A SUBSIDIARY FOR OIL PRODUCTION (for ... year) [p.244]

TABLE 25 FORM OF THE CONSOLIDATED INVESTMENT BUDGET OF A VERTICALLY INTEGRATED OIL COMPANY (for ... year) [p.247]

TABLE 34 FORM OF A PERSPECTIVE CONSOLIDATED INVESTMENT BUDGET FOR A VERTICALLY INTEGRATED OIL COMPANY (for ... years) [p.258]

Investment budget 4.3 Loan budget 4.3 Tax budget 4.3 Budgetary relations 3.5,6.2 Budgetary powers and responsibilities 2.4,2.5 [p.269]

Each country began to increase oil production, ignoring the collective interests of OPEC. Disorder began within the ranks of the organization. In 1992, Ecuador left its membership, and in 1996, Gabon. Being the smallest producers in the organization, they experienced acute financial difficulties. The quota system forced them to limit their already small production, even the annual contributions to OPEC turned into a heavy burden on their government budgets. Being members of OPEC, they could not attract foreign investment in the development of the domestic oil industry, and they did not have enough of their own funds. [p.30]

Evaluation and analysis of the effectiveness of work to close unprofitable and unpromising mines is carried out from the position of each investor. The bulk of investment in closing unpromising mines usually comes from the federal (state) budget, but regional bodies and other interested organizations may also participate in this financing. In these cases, each of these investors fixes the effect they receive in the contracts they conclude (see 5.2). Let us list the main components of the budgetary effects and BE costs arising from the closure of unprofitable enterprises in the coal industry, which are taken into account when assessing the effectiveness of mine liquidation. [p.204]

In the market economy of all countries, the main environmental investments are made by enterprises from their own resources, since environmental costs must compete with other costs in the investment budget. Thus, in the USA, over 60% of environmental costs are covered by private enterprises to comply with environmental standards /75/. Local authorities estimate taxes and user fees as a financial source, providing an additional 20% of funds /75/. The remaining costs are paid by federal and state agencies and are raised through taxes, user fees, and alternative funding sources such as revolving funds. As a result, there is significant incentive for businesses to improve their operational technology or seek cost reductions to meet their environmental obligations. However, in CEE countries, including Russia, there is a deep-rooted view that improving environmental performance depends only on new capital investments, although much can be achieved at low cost through effective AML management. [p.21]

Tax reform is lagging behind. Now even a reduction in rates will not entail strengthening tax discipline and increasing tax revenues to the budget. This means that any attempts to stimulate the investment activity of industrial enterprises through a system of tax incentives are ineffective, since the current level of taxes is too high. According to estimates by enterprise managers, the total amount of taxes that an enterprise must pay is about 95% of its total profit. Thus, as a result of stimulating investment through tax incentives for enterprises, a paradoxical situation may arise: tax payments will decrease along with the investment activity of enterprises. [p.164]

According to the Decree of the President of the Russian Federation "On the main directions of tax reform in the Russian Federation and measures to strengthen tax and payment discipline" the minimum values ​​of the shares of tax revenues in budgets of different levels for environmental taxes are in the Federal budget - 30% in the budget of the constituent entities of the Russian Federation - 30%, to local budgets - 10%. The remaining 30% should remain at the disposal of enterprises for environmental activities. If we legislate that it is mandatory to use these funds for the reconstruction and construction of installations that will radically improve the quality of petroleum products, then this source of investment can radically change the current situation in oil refining. [p.178]

Regional government bodies can independently act both as a direct subject of the regional production and social complex, and as an initiative industrial investor. However, the latter should occur rather as an exception. For municipal bodies and their budgets, it is much more profitable to share participation in production investments, and not in monetary form, but in the form of a contribution to the authorized capital of regional resources (land, water, subsoil, etc.). [p.143]

There is a pattern that is confirmed by scientific research and statistics - the higher the level of tax withdrawals, the lower the rate of economic growth in the country, and vice versa. This pattern can be clearly seen in the Russian economy over the past 10 years. Therefore, when developing tax policy and further reform, it is necessary to clearly understand its target orientation, or the problem of a continuous influx of money into the budget through the tax burden is solved, but then the rate of economic growth slows down, or we focus on a taxation system that stimulates investment and economic growth. [p.277]

The business philosophy at Dow Chemicals before 1993 was something like this: Bring a good project, and we’ll find the money for it. This philosophy was based on a specific distribution of power in the company. Managers of large product divisions fought fiercely to increase the investment budget for their business. They tried to maximize production capacity, and then decide where to find orders to load the created capacity. The heads of divisions not only had great weight in the company, but were also official members of the Board of Directors. Thus, the Board of Directors became a battleground over which specific project would receive priority funding. All investments were distributed in a similar way, although formally there was a general strategic plan for the corporation. [p.136]

First of all, the main directions of spending oil money in Libya were changed quite radically. To this end, rapid growth of state capital accumulation compared to current expenditures was ensured, as well as a significant increase in the rate of public investment or the ratio of state capital expenditures to the total amount of budget revenues. As a result, the rate of growth of public capital expenditures in the 70s in Libya was almost 2.6 times higher than the rate of increase in current expenditures in the administrative budget, and the rate of public investment from a level of less than 30% was brought to more than half of state budget revenues (calculated according to [ 94, pp. 2 262, pp. 40-42 284, pp. 122, 125]). [p.161]

A number of joint ventures have been successfully operating in the Komi Republic for 6 years. The most developed companies were KomiArtikOil, Nobel-Oil, Severnaya Neft, and KomiQuest. The operation of these joint ventures is beneficial for the region, as it attracts Western investments, technologies, equipment, and ensures stable revenues to budgets of all levels. [p.21]

In this regard, it should be noted that real financial stabilization is characterized by a complex of interrelated and mutually influencing indicators, namely the stability of the budget system, the reliability of financial institutions, the rationality of monetary circulation, the stability of the financial position of enterprises in the real sector of the economy. In this context, the purely monetary results of financial stabilization look very dubious. In fact, in 1996, the drop in profits in the main industries of the real sector exceeded 70%, the share of unprofitable enterprises increased 1.5 times and reached 56% by the end of the year. Thus, in 1996, a new, extremely low level of self-sufficiency of the real sector with financial resources was formed, which does not provide not only expanded, but even simple reproduction. Investments in fixed capital decreased in 1996 by 18%. The problems of the growing crisis of non-payments, including to budgets of all levels and the reverse flow of funding from the budget, are derived from the ongoing process of economic decline. Consequently, the policy of macroeconomic stabilization, expressed in maintaining the money supply within certain limits, turns out to be untenable in terms of ensuring investment and economic growth. Monetary policy is only part of the economic policy of the state. In this regard, setting the task of ensuring economic growth on the basis of financial stabilization seems erroneous. These issues need to be addressed comprehensively and simultaneously. The need to take into account a number of factors when taking monetary regulation measures can be seen at least in the example of the intertwining of the interests of Russian exporters and the task of strengthening the national currency. The task of ensuring the influx of credit resources into industry, construction, and agriculture should be solved in conjunction with stimulating the increase in the own funds of commercial banks, because only “zero” [p.165]

The ongoing housing and communal services reform is of enormous socio-economic importance, as it affects the interests of every Russian family and requires large financial investments from the state budget. The cost of the reform, according to various estimates, from 2001 to 2010. will amount to 600-700 billion rubles. At the same time, the state has to rely only on its own strength, since in the coming years there is no need to expect a flow of investment in this area due to its unattractiveness. The housing and communal complex (HCC) is in critical condition. Most public utilities are unprofitable. As of January 1, 2001, accounts receivable amounted to 168.1 billion rubles, accounts payable - 245.1 billion rubles. About 30% of water supply capacities and 16% of water supply networks require urgent modernization. Of the existing sewage treatment plants, 60% are overloaded, 38% of the structures have been in operation for 25-30 years and require urgent reconstruction2, etc., etc. This was largely facilitated by the following factors: decentralization of housing and communal services management was not compensated by the organization of strict state control; the existing economic mechanism is costly and does not create incentives for real savings; unsatisfactory financial condition of housing and communal services enterprises due to accumulated debts due to non-payment of subsidies by local budgets for the difference in tariffs and finally, the last thing - a radical change in the existing housing and communal services system, in a relatively short period of time, is far from the best solution, it can only be radically destroyed. [p.75]

State and municipal enterprises as consumers of budget investments

Fiscal sources invest government funds in:

budget investments in capital construction projects for state and municipal structures;

• acquisition of new property for such organizations;
• fixed assets of national authorities and municipalities;
• restoration and reconstruction of buildings and premises.

There is also a resolution on technical regulations. It designates a number of categories of property that are subject to an infusion of money from the state treasury:

• buildings for work, recreation and preservation of the population’s valuables;
• technical, industrial structures, construction sites, including components of transport facilities and telecommunications;
• housing - urban living space.

  

What is investment?

Investment is the investment of money (securities, enterprises, etc.) in order to obtain funds. It can be:

• deposits in banking institutions;
• shares;
• securities;
• equipment;
• lending;
• intellectual property;
• entrepreneurial projects.

The company can invest money in sectors such as industry, transport, and agriculture.

Crowdfunding as an alternative way to attract investment in business activities

Budget investments as a source of funds for non-state companies

The Russian Federation is interested in the formation of domestic entrepreneurship and the extraction of income from invested funds. At the government level, these plans arise very infrequently and usually affect industrial giants who previously received their share of national capital.

This method of distributing money from the state treasury affects to a greater extent partnerships between national enterprises and private sector companies. Funds are credited to the fixed assets of these enterprises, in accordance with the Book Code of the Russian Federation. Thus, no direct profit is made.

At the regional level, between the state treasury and the enterprise, district municipal enterprises are a kind of intermediaries, which contributes to the fair distribution of money. Fiscal investments are directed to precisely defined purposes.

The government carries out direct activities in the financial life of the state and the processes of investing money from the state budget by establishing the corresponding legal entities. Among the largest state corporations and companies, one can note large players in various sectors of the national economy, which largely determine the direction of the industry process as a whole.

Through state corporations and large companies, the government implements freedom in the distribution of investments, since organizations choose directions for further allocation of resources at their own discretion, and then themselves control the investments made. In this way, a healthy environment in public investment is created, as long as government agencies do not directly participate in the distribution of fiscal money, and funds for financial investments are still allocated.

Public investment - where is it going?

First, it’s worth understanding where the money from government investments goes. You need to understand that anyone cannot get money just because they wanted it. The state primarily invests in socially significant sectors. If you come to an official with a project that does not currently belong to this category, you will be refused. Indicative is the fact that the commercial component is paid attention to in the very last place. Let's now take a look at what industries are considered significant at the moment in Russia:

• Small business. One of the main priorities set by the state is the development of local business and small companies. According to the country's leaders, this will create a so-called middle class, and will also increase tax revenues.
• Agriculture. It is no secret to anyone that villages are gradually dying, primarily due to lack of finance. Public investment is designed to solve this problem. The development of agriculture is also one of the main priorities of the country's economic policy.
• Ecology . Various environmental programs have appeared relatively recently and projects are still poorly funded. As a rule, we are talking about the modernization of large industrial enterprises in order to reduce the release of harmful substances into the environment.
• Projects aimed at improving the quality of life of socially disadvantaged segments of the population. First of all, these are disabled people and orphans.

These are areas that are relevant throughout the country, but do not forget that at the regional and local level it is also possible to obtain funding through public investment.

If we consider directions for individual investments, then we should give preference to reliability and stability. Real estate, namely foreign real estate, combines these qualities. Now there are a lot of attractive apartments or houses, at low prices, but with enviable investment attractiveness. For example, we recommend that you read the material “BUY REAL ESTATE IN THAILAND”. By the way, speaking about Thailand, we can answer that this country can be considered for permanent residence, of course it has its own characteristics, but where they are not. “MOVING TO THAILAND FOR PERMANENT RESIDENCE – WAYS OF LIVING, PROS AND CONS” will tell you about the secrets and realities of this country.

How are budget investments reflected in accounting?

The procedure for providing public investment is modified depending on the region. Most often, government funds are issued on the basis of appropriate contracts signed between municipal and non-state enterprises. In order to ensure accurate accounting of the expenditure and use of money from the state budget, instructions were drawn up on how to carry out accounting.

Funds under the guise of subsidies are credited to the organization’s balance sheet and should be properly reflected in its accounts. Budget investments are provided in the following ways:

• the rights of the state customer are assigned;
• relevant agreements are signed;
• finances are transferred in accordance with the procedure for providing subsidies from the state budget introduced by law.

To universalize the accounting of processes accompanying the accrual of funds from the budget, the Ministry of Finance of the Russian Federation drew up letter No. 02-06-07/5397 in 2010, containing a table of the ratio of accounts, on the basis of which accountants should draw up reports .

In the case where a non-budgetary company becomes the target of state investment, you should especially carefully check the compliance of your accounting with the recommendations of the Ministry of Finance. Otherwise, all sorts of misunderstandings cannot be avoided. It is also necessary to account for the monetary resources arriving on the balance sheet of organizations from state corporations under special programs. Accounting is carried out in accordance with the conditions of the enterprise that is the investor in this case.

Sources of money from the state budget are various structures. At the regional level, the district treasury can serve as a contributor; subsidies are also allocated through Employment Centers, special funds and other similar institutions.

Role in the economy

Budgetary investment is an integral part of the policy of the Russian Federation. Proper infusion of funds supports the stable growth and development of the economic component of the country.

Investment efficiency can be defined as the difference between total budget revenues and expenditures. But in fact, the main goal of state investment is not only to make a profit, but also to restore economically significant enterprises. Due to high competition and wear and tear, companies cannot cope with production, contributing to the deterioration of the state's financial policy.

Today, budget investment has the following directions:

1. Qualitative improvement of public infrastructure.
2. Elimination/reconstruction of emergency housing.
3. Maintaining a good standard of living for citizens.
4. Development and restoration of the road network.
5. Improving the healthcare sector.
6. Construction of social and cultural facilities.

In practice, budget subsidies and investments can ensure a stable increase in the standard of living in the country, successfully developing all areas of activity. Budget investments play a special role in the lives of small entrepreneurs. Venture capital investments contribute to the development of business projects with enormous potential.

If we talk about the shortcomings of investment, then the only thing that should be highlighted is that the established methodology of federal programs does not fully comply with the needs of program-target planning.

What do we spend budget money on?

In recent years, the main direction of budget investment has been road construction. But experts expect the situation to change due to the need to implement the latest May decrees of the President. They involve investing in the development and support of infrastructure industries. All funded areas over the past 4 years can be tracked in the table (according to the Ministry of Finance).

The state, like a private investor, is looking for an answer to the question of where to invest money. Budget investments are made with the aim of:

• increasing the value of state assets;
• increasing the operational efficiency and competitiveness of economically significant enterprises;
• restoration of infrastructure of vital industries;
• reducing the wear and tear of real estate in budgetary institutions.

In 2021, for example, projects such as:

1. Construction of a section of the Sokolnicheskaya line of the Moscow metro from the Salaryevo station to the Stolbovo station – 40.8 billion rubles.
2. Construction of the launch complex at the Vostochny cosmodrome – 38.7 billion rubles.
3. Construction of a tunnel under the Kaluga Highway and a multi-level interchange at the Stolbovo transport hub - 27.5 billion rubles.
4. Reconstruction and construction of the highway “Varshavskoye Highway – Andreevskoye Village – Yakovlevo Village” – 14 billion rubles.
5. Reconstruction of the M-18 “Kola” highway from St. Petersburg to the border with Norway – 12 billion rubles.

These are large-scale, expensive projects. An analysis of the 10 largest government contracts showed that 8 out of 10 relate specifically to the road sector.