REGULATORY FORMATION AND ACCOUNTING OF EQUITY AT LIMITED LIABILITY COMPANIES
Authors: ISHCHENKO Yana 
Published: February 2020

The structure and dynamics of equity capital are the basis for determining the indicators that characterize the financial position and financial sustainability of the enterprise. Information support for the effective management of the company's own capital is formed, mainly, by the system of accounting and financial reporting.

Reliable and complete coverage of the financial statements of information on the size and composition of equity capital is fundamental for an objective assessment of the financial status and efficiency of the enterprise and for making further decisions by owners, investors, creditors and other users of information.

Over the past few years, some changes have been made in the way in which the equity of the enterprise is reflected in the accounting, which requires detailed analysis and evaluation of changes to find ways to improve the accounting of equity capital of the enterprise.

The purpose of this publication is to study the legal regulation of the formation and accounting of equity, in particular in limited liability companies, as well as the development of organizational principles of its accounting.

Financial independence of the enterprise and other indicators of the financial state directly depends from the complete and clear legal regulation of accounting of equity capital by enterprises of various organizational and legal forms, the effectiveness of the information management of capital formation, profit distribution, dividend and other corporate rights.

The normative regulation of the accounting of own capital in Ukraine at the state level (macro level) and at the level of economic entities (micro level) is investigated.

From June 17, 2018, the new Law on Limited Liability and Additional Liability Companies came into force. The fundamental change in the regulation of the activities of economic entities of such organizational and legal forms leads to the need to amend its constituent documents and internal accounting regulations.

Changes made in accordance with the Law concerning the formation of the authorized capital of the companies with limited liability and additional liability are considered.

An exemplary section of the order on the accounting policy that will regulate the accounting of own capital is designed and offered for practical use by limited liability companies.

The formation of such section will allow the reconciliation of the accounting policies and constituent documents in order to meet the interests of users in accounting for equity capital. After all, the proper formation of accounting policies is an important element of internal regulation of the formation and accounting of equity, contributes to improving the completeness and reliability of information about the financial condition of the enterprise.

Based on the study of legal regulation of formation and accounting of equity in limited liability companies, it was found that at the macro level the state regulates only certain aspects of these processes. Moreover, there remains a wide range of variability in the selection of organizational and methodological approaches to accounting of equity capital. This, in turn, provides the opportunity for the owners of the companies to choose the optimal alternative accounting option for this particular entity, taking into account the specifics of its activities. The main internal regulations of enterprises regulating the issues of formation, use and accounting of own capital are the statute and order on accounting policy. The research revealed shortcomings in the formation of norms as a charter and an order on accounting policies of limited liability companies in respect of own capital.

Proposed changes to the specified internal regulations of limited liability companies, which will bring their norms in line with the norms of legislation, in particular with the norms of the Law of Ukraine "On Limited Liability Companies" of 22.06.2018, № 2275-VIII, and will allow to obtain full, relevant , unbiased information about equity capital for all the interested parties.