CAPITAL INVESTMENTS: ESSENCE AND REGULATORY ACCOUNTING

Abstract

Capital investments are defined in accordance with Standard 26/2020 as expenses for the purchase and creation of facilities, and are intended to ensure the reproduction of fixed assets. Investments are made through the construction of new non-current assets, their improvement, and the development of construction technologies, as well as the implementation of commissioning and testing procedures. Since capital construction requires a significant amount of financial resources and time, it is essential to establish a well-defined accounting mechanism based on the legal acts enacted by the government. An important task in the accounting of capital investments at this time is to apply approaches to optimize Russian accounting of investments through international standards. Gradually, we are moving towards a unified base for accounting and evaluation of funds invested in non-current assets. According to IFRS, assets must be reliably evaluated in order to be recognized in accounting. The Federal Standard of Accounting and Reporting states that at the initial recognition of assets in the form of fixed assets, the accounting value is equal to the costs associated with the acquisition of the asset, i.e., the cost of the asset. The excellent accounting practices under international financial reporting standards are somewhat different from the Russian regulations. The article discusses the accounting nuances of capital investments and provides a comparison between IFRS and FSBU in this area.