For the occurrence finance As a sphere of economic relations, it is necessary for the emergence and coincidence in time at a certain historical stage of a whole set of conditions (or prerequisites), such as:

• education and recognition of individuals for goods, services, land, etc.;
• the existing system of legal norms regarding property relations;
• strengthening the state as a spokesman for the interests of the entire society, acquiring the status of owner by the state;
• the emergence of socially diverse population groups.

All these conditions arise under one general prerequisite: a sufficiently high level of production, an increase in its efficiency, growth and exceeding the limits necessary for biological survival.

The formation, distribution and use of monetary income is the main condition for the emergence of finance.

Financial interests are the interests of the owners of monetary income.

For the emergence of finance, a high level of development of the monetary economy, a constant circulation of money in large quantities, and the formation and use of the basic functions of money are also necessary. Finance- is the movement of cash income. Financial relations always affect property relations. These are not only monetary relations, but also property relations. The subject of economic relations must always be the owner. It is by distributing and using cash income, of which he is the owner, that each participant in economic relations can realize his interests.

Financial resources

No economic or political decision of any importance can be implemented without a preliminary assessment of the amount of monetary income required for this. The distribution and accumulation of monetary income acquires a targeted character. The concept of “financial resources” arises. Being monetary income, accumulated and distributed for certain purposes, financial resources are used for various social, economic, scientific, cultural, political and other purposes (Fig. 18).

Financial resources- These are accumulated incomes intended for specific needs.

Rice. 18. Main directions of use of financial resources

Financial resources serve all stages of the movement of cash income from their formation to use.

Since finances are determined by the movement of cash income, the patterns of their movement affect finances. Income usually passes through three stages (stages) in its circulation (Fig. 19):

Rice. 19. Stages of cash flow (finance)

Finance, as we see, relates to all stages of the formation, distribution and use of monetary income. Primary income are formed as a result of the sale and distribution of proceeds from the sale of goods and services. Since the production process is, as a rule, continuous, it is necessary to allocate part of the proceeds at the stage of sales of goods to ensure the continuity of the production process.

Primary income is formed as a result of expanded commodity production and is serviced by finance.

Rice. 20. Process of expanded reproduction

Primary distribution is the formation of primary income based on gross receipts.

Secondary distribution of monetary income (redistribution) can occur in several stages, that is, it is of a multiple nature.

As can be seen from the schematic recording of the abstract production process (Fig. 20), any production ends with the primary distribution of monetary income, without which further economic development is impossible. And the distribution of money income ( D") is served by finance. The allocation of financial resources for the expansion of production takes the following forms: payment of current material costs, depreciation of equipment, rent, interest on loans, wages of workers employed in this production. After the primary distribution of monetary income, the processes of redistribution begin, i.e., the formation of secondary income. These are primarily taxes, contributions to insurance funds, contributions to social, cultural and other organizations.

Last stage distribution and redistribution of income - their implementation. Realizable income called final. Part of the final income may not be realized, but directed towards accumulations and savings. However, there is the following financial equality, which is not violated under any circumstances:

ΣA = ΣB + ΣС,

• A- primary income;
• IN— final income;
• WITH- savings and savings.

The distribution process is influenced not only by finances, but also by prices.

Since the process of selling any goods (goods, services, etc.) into monetary income is carried out at certain prices, then price dynamics has an independent impact on the distribution process. The more prices change (both up and down), the more money income fluctuates. These shifts occur especially sharply in conditions of inflation.

Financial resources as part of cash income come in various forms. For the real sector of the economy (production) this is part of the profit, for the state budget - the entire amount of its revenue part, for a family - all the income of its members, etc.

Financial resources- this is that part of the funds that can be used by their owner for any purpose at his discretion.

The process of distribution and redistribution of financial resources

Financial resources are offered on the market by a large number of business entities and the population. It is clear that potential users (consumers) of these funds are not able to independently establish business relationships with every business entity, with every citizen. In this regard, the problem arises of combining scattered savings into significant amounts of financial resources that can be offered for use by a large potential investor.

This problem is solved financial intermediaries(banks, investment and mutual funds, investment companies, savings associations and
etc.), which accumulate free resources, primarily from the population, and pay interest on these resources. Financial intermediaries provide raised resources as loans or place them in securities. Their income consists of the difference between the interest paid on the resources attracted and the interest received on the resources provided.

Owners of cash savings can transfer their funds to investment companies, or they can directly acquire industrial corporations. But in the second case, they will encounter intermediaries - dealers And brokers, which represent professional participants in financial markets. Dealers carry out transactions independently, on their own behalf; brokers act only on behalf of clients and on their behalf.

Timely financial market offers potential investors wide investment opportunities through the acquisition of monetary obligations of a wide range of business entities. These monetary obligations are called financial instruments. These include: promissory notes, futures contracts, etc. A variety of financial instruments allows money owners to diversify their investment portfolio, that is, invest their savings in the obligations of different companies and banks. These obligations will have different returns, but also different degrees of risk. If a company goes bankrupt, investments in other companies will remain. Diversification of an investment portfolio is carried out according to the principle: “you cannot put all your eggs in one basket.”

Financial relations as a sphere of economic activity

Financial relations- these are relations associated with the distribution, redistribution and use of monetary income.

The phenomenon of financial relations as a sphere of economic relations in society arises at the stage of distribution of primary income (Fig. 21).

Rice. 21. Financial relations at the stage of distribution of primary income

Financial relations, arising in connection with money and servicing the circulation of money income, concern almost all individuals and legal entities. Main participants in financial relations are producers of any product (real sector of the economy); budgetary and non-profit organizations; population, state, banks and special financial institutions. In the course of their development, financial relations give rise to credit and exist with them in close relationship (Fig. 22).

Credit relations is part of financial relationships. Both are the result of monetary relations.

Rice. 22. The place of credit and financial relations in the structure of economic relations

Credit relations arise in connection with the provision of money by one entity to another (individuals and/or legal entities) on the terms urgency, repayment, payment.

The main difference between financial and credit relations is the repayment of funds provided on the terms of urgency, repayment and payment.

Usually isolated three stages of income flow, reflecting the formation of primary, secondary and final income.

Primary income are formed as a result of distribution (work, services). The amount of revenue is divided into a fund for compensation of material costs incurred in the production process (cost of raw materials, equipment, rent), the employee and the owner of the means of production. Thus, during the primary distribution, the income of the owners is formed. In addition, the following circumstance should be taken into account: indirect taxes established by the state are included in primary income. Therefore, at this stage, government revenues are partially generated.

At the second stage, from primary income Direct taxes and insurance payments are paid, and assistance is provided to the disabled. From the newly created funds of funds, in particular, from various levels of government, funds are paid representing the expenses of workers in the non-material sphere, doctors, teachers, notaries, office workers, military personnel, etc.

As a result of this process, a new income structure is formed. It consists of secondary incomes formed during the redistribution of primary incomes.

But doctors, teachers, and employees, in turn, pay taxes and make insurance contributions. These taxes and contributions form funds intended for certain payments. As a result of such payments, tertiary income may be generated. The chain of their formation is almost impossible to trace. The movement of these incomes is a very complex process.

The result of this process, its third final stage, is the formation of final income. They are used to purchase goods and services. A certain portion of income is saved.

The amount of primary income for a certain period necessarily equals the amount of final income plus savings. Distribution and redistribution of income means the formation of a new structure. Moreover, this structure reflects the economic relations (connections) between economic structures and the state.

At each stage of income generation, funds of funds are formed, i.e. finance. Consequently, it is finance that mediates the processes of distribution and redistribution of income.

The result of the functioning of the financial system is a changed structure of income.

Distribution process added(newly created) cost through is shown in Fig. 1. As can be seen from Fig. 1, as a result of the distribution of primary income of owners (entrepreneurs and workers), the income of workers in the non-material sphere is formed. However, it should be taken into account that in reality distribution processes are much more complex than reflected in Fig. 1. Part of the income of workers in the material sphere is distributed in favor of workers in the non-material sphere directly through the consumption by the former of services provided by the latter. This is how the income of lawyers, notaries, security guards, etc. is formed. In turn, they pay taxes to budgets participating in subsequent redistributions of income.

Finance as monetary relations arises at the stage of distribution. But they are the most important link in everything and have the strongest influence on it.

Rice. 1. Distribution of added value through the financial system

Control function

Control function consists of constant monitoring of the completeness, accuracy and timeliness of receipt of income and implementation of expenses from all levels and. This function manifests itself in any financial transaction. All these operations must not only be economically feasible, but also not contradict current legal norms. The control function of finance is expressed in the formation of funds of funds (budgets and extra-budgetary funds) in accordance with the declared goals and according to the standards established by the legislature. This function involves not only monitoring processes occurring in the financial sector, but their timely adjustment in accordance with the norms of current legislation.

The practical expression of the control function of finance is the system. This control ensures the validity of the formation of budget system revenues and the expenditure of budgetary funds and extra-budgetary funds. Financial control is divided into preliminary, current and subsequent. Preliminary control is carried out at the stage of developing forecasts of budget revenues and expenses and preparing draft budgets. Its purpose is to ensure the correctness of budgetary indicators. Current control is responsible for the timeliness and completeness of the collection of planned income and the targeted expenditure of funds. Subsequent control is aimed at verifying the reporting data.

Stimulating function

Stimulating function finance is associated with the impact on processes occurring in the real economy. Thus, during the formation of budget revenues, tax benefits may be provided for certain industries. The purpose of these incentives is to accelerate the growth rate of technologically advanced products. In addition, the budgets provide for expenses that can ensure structural restructuring of the economy through financial support for high-tech technologies and the most competitive industries.

Finance, understood in the broad sense of the word, includes all monetary funds, including loans. Therefore, credit relations are part of finance. is the movement of the loan fund.

One can also define credit as a system of economic relations regarding the transfer from one owner to another for temporary use of values ​​(including money). Credit relations have their own specifics. A loan is associated with the transfer of a fund of funds for temporary use on the terms of repayment, urgency, payment, and security. These conditions distinguish credit relationships from other financial relationships.

See also:

The formation and use of financial resources is carried out at two levels: nationwide and at each enterprise. The size and structure of sources for the formation of financial resources on a national scale determine the possibilities for expanded reproduction of the national economy, raising the level of members of society, and increasing state budget revenues. The size of financial resources generated at the enterprise level determines the possibility of making the necessary capital investments, increasing working capital, fulfilling all financial obligations, and meeting social needs.

The initial formation of financial resources occurs at the time of establishment of the enterprise, when the authorized capital is formed. Its sources, depending on the organizational and legal forms of management, are: share capital, share contributions of members of cooperatives, industry financial resources (while maintaining industry structures), long-term credit, budget funds. The size of the authorized capital shows the size of those funds - fixed and working capital - that are invested in the production process.

The main source of financial resources in operating enterprises is the cost of products sold (services provided), various parts of which, in the process of revenue distribution, take the form of cash income and savings. Financial resources are formed mainly from profits (from core and other activities) and depreciation charges. Along with them, sources of financial resources also include:

• -- proceeds from the sale of disposed assets,
• -- stable liabilities,
• -- various targeted revenues (fees for maintaining children in preschool institutions, etc.),
• -- mobilization of internal resources in construction, etc.

The processes of privatization of state property that are unfolding everywhere lead to the appearance and will play an important role of another source of financial resources - shares and other contributions of members of the labor collective.

Significant financial resources, especially for newly created and reconstructed enterprises, can be mobilized in the financial market. The forms of their mobilization are: sale of shares, bonds and other types of securities issued by a given enterprise, credit investments.

Before the transition to market economic conditions, significant financial resources of the enterprise were obtained on the basis of intra-industry redistribution of funds and budget financing. However, the principles of market management and the introduction of commercial principles into the activities of enterprises naturally required fundamentally different approaches to the formation of financial resources. Orientation towards initiative and entrepreneurship, full financial responsibility led to two major changes in the field of financial relations of enterprises with other structures: firstly, the development of insurance operations, and, secondly, a significant reduction in the scope of gratuitous appropriations. In this regard, during the transition to market principles of economic management, insurance compensation payments received from insurance companies will gradually play an increasingly greater role in the composition of financial resources formed in the order of redistribution, and budget and industry financial sources will gradually play a lesser role. Enterprises will be able to receive financial resources: from associations and concerns of which they belong (only if this is provided for by the mechanism for using the corresponding monetary funds); from higher organizations - while maintaining industry structures; from government bodies - in the form of budget subsidies for a strictly limited list of costs. But in the conditions of functioning of the securities market, such types of financial resources will appear as dividends and interest on securities of other issuers, as well as profit from financial transactions.

The use of financial resources is carried out by the enterprise in many areas, the main of which are:

• -- payments to the authorities of the financial and banking system, conditioned by the fulfillment of financial obligations. These include; tax payments to the budget, payment of interest to banks for using loans, repayment of previously taken loans, insurance payments, etc.;
• -- investment of own funds in capital costs (reinvestment) associated with the expansion of production and its technical renewal, transition to new advanced technologies, use of know-how, etc.;
• -- investment of financial resources in securities purchased on the market: shares and bonds of other companies, usually closely associated with cooperative supplies with a given enterprise, in government loans, etc.;
• -- direction of financial resources for the formation of monetary funds of an incentive and social nature;
• -- use of financial resources for charitable purposes, sponsorship, etc.

With the transition to market economic principles, not only the role of enterprise managers and members of the boards of joint-stock companies, but also financial services, which played a secondary role in the conditions of administrative-command management methods, increases unusually. Finding financial sources for the development of an enterprise, directions for the most effective investment of financial resources, transactions with securities and other issues of financial management become fundamental for the financial services of enterprises in a market economy. The essence of financial management lies in such an organization of financial management on the part of the relevant services, which allows you to attract additional financial resources on the most favorable terms, invest them with the greatest effect, and carry out profitable transactions in the financial market, buying and reselling securities. Achieving success in the field of financial management largely depends on the behavior of financial services employees, in which initiative, the search for unconventional solutions, the scale of operations and justified risk, and business acumen become the main ones.

When mobilizing funds from other owners to cover the costs of their enterprise, financial service employees must first of all have a clear understanding of the goals of investing resources and, in accordance with them, make recommendations on forms of raising funds. To cover short-term and medium-term needs for funds, it is advisable to use loans from credit institutions. When making large capital investments in the reconstruction and expansion of an enterprise, you can use the issue of securities. However, such a recommendation can only be given if financiers have thoroughly studied the financial market, analyzed the demand for different types of securities, taken into account possible changes in market conditions and, having weighed all this, are nevertheless confident in the relatively quick and profitable sale of their securities enterprises.

Planning the amount of current financial needs takes into account the following:

• - the real value of the enterprise’s needs in the past period;
• - changes in needs in the coming period, based on market conditions and the objectives of the enterprise;
• - the risk of an increase or decrease in the need for financial resources in the coming period.

Financial relations that arise in the process of formation and use of the financial resources of an enterprise are formed in the process of circulation of its funds, which is mediated by cash flows for various types of its activities.

• 1. Current activities. Movement of funds associated with the receipt of proceeds from the sale of products, goods, works, services and inventories of production and material resources, receipt of advances, rent, payment of supplier bills, payment of wages, settlements with the budget and social funds, receipt and return short-term loans and borrowings for purposes related to current activities, payment of interest on these loans and borrowings, payment and receipt of penalties and pledges.
• 2. Investment activities. Movement of funds associated with capital investments in connection with the acquisition of land, buildings and other real estate, equipment, intangible assets and other non-current assets and their sale; with long-term financial investments in other organizations, issuing bonds and other long-term securities.
• 3. Financial activities. The movement of funds associated with the formation and use of authorized capital, additional capital, distribution and use of profits, long-term and short-term financial investments, sale of corporate securities, obtaining long-term and short-term credits, borrowings, repayment of receivables and payables in non-traditional ways (changes of persons in obligation, novation, compensation), receipt and use of targeted financing and proceeds, as well as settlements for transactions related to agreements of trust management of property, simple partnership (joint activity).

Thus, the entire set of financial relations of enterprises associated with the formation and use of financial resources can be conditionally presented in the form of three cash flows, and have clear cost characteristics. Cash flows affect the entire structure of the enterprise's balance sheet, its assets and liabilities, and its financial stability.

The “outflow” of part of an enterprise’s cash flow in the form of payments to budgets and extra-budgetary funds means the non-equivalent withdrawal of these funds from its individual circulation. These funds go through a redistribution phase and take the form not of cash, but of financial flow.

Financial flow is a redistributed part of cash flows (primary income of enterprises) accumulated in the budget or in extra-budgetary (centralized) funds, i.e. in the field of public finance. A synonym for the concept of “financial flow” is “financial funds”. This is part of the cash flows that have gone through the process of accumulation in various centralized state funds (in the budgetary system and in extra-budgetary funds), directed towards targeted financing. (3, pp. 14 - 17)

Part of the proceeds from the sale of products should be used to reimburse material costs and pay for labor. But already from the revenue received, the enterprise accumulates funds (funds) in the form of depreciation charges for fixed assets and intangible assets. They are intended for the acquisition of new necessary property, but before its acquisition they are in the circulation of the enterprise.

Using the proceeds received from the sale of products, cash reserves are formed for future expenses and payments, the composition of which is regulated by the relevant regulatory document in the field of accounting and state accounting policy. A repair fund may also be formed, designed to evenly distribute the costs of particularly complex types of repairs of fixed production assets in the cost of production.

The process of distribution is accompanied by a process of redistribution. When paying wages, income tax and contributions to the pension fund are withheld, and funds are transferred to extra-budgetary funds.

The total amount of paid revenue of the enterprise includes income in the form of profit. The total amount of profit does not immediately participate in monetary circulation, since a certain part of it is redistributed in the form of tax payments to the budget system. As a result, retained earnings (from previous years and the reporting year) remain in the enterprise’s turnover, representing the amount of net profit, i.e. the difference between the final financial result (gross profit) and the amount of profit used to pay taxes and other payments to the budget.

Then the net profit can be distributed into an accumulation fund, which serves as a source of financing capital investments, and a consumption fund, intended to satisfy various social needs and material incentives. Both of these funds are formed in accordance with the constituent documents, decisions of the general meeting of shareholders or the accounting policies of the enterprise.

A reserve fund can also be formed from net profit. It is formed in accordance with current legislation, constituent documents or accounting policies of the enterprise.

In the process of redistribution, a number of monetary sources are formed that have the nature of funds:

• - authorized capital (share capital, authorized fund) - is formed when an enterprise is created at the expense of contributions from the founders (participants) or at the expense of property assigned to the enterprise by the owner. The procedure for its formation (minimum amount, terms of contributions, additional attraction of funds) is regulated by law. The authorized capital is intended for the advance of funds into non-current and current assets.
• - targeted financing and revenue from the budget - in cases provided for by relevant laws.
• - targeted financing and revenues from industry and intersectoral extra-budgetary funds and from other enterprises and individuals for the implementation of targeted activities.

Cash sources in the form of share premiums, gratuitous receipts that make up the monetary part of additional capital, and reserves for future expenses and payments can participate in the circulation of funds of an enterprise.

In the process of carrying out economic activities, other monetary sources (raised capital) are also involved in the individual circulation of funds of the enterprise in the form of long-term and short-term loans and other loans, and in the form of accounts payable. (3, pp. 18 - 19)

Here we will collect everything related to a reasonable approach to personal finance: what to spend on, where to get it, etc. There are many methods for allocating expenses, however, many of these methods have general principles, which we will consider below.

What do a free bachelor and an exemplary family man, a stay-at-home mom and a nightclub conqueror have in common? Right! All of them periodically scratch their heads thoughtfully, asking the long-standing rhetorical question: “Where does the money go?” At the same time, you probably know people who have found a middle ground between austerity and criminal extravagance. They do not ask themselves and others rhetorical questions. They gradually move towards their goal (each has their own goal). At the same time, they do not consider themselves disadvantaged in any way - simple planning of personal finances and family budgets works wonders!

The main rule: income must be greater than expenses.

Consider income and expenses

Does money disappear without a trace? Get a special program for budgeting, create it yourself, or buy a notepad. To create a monthly budget, you will have to write down all your expenses for six months, so you can average it out and figure out how much of your income you can save to make your dreams come true. Income includes:

• Salary: yours and your significant other’s (if you have one);
• Additional part-time jobs (good material: and +);
• Outside help (parental, sponsorship, etc.).

Record everything, down to the smallest detail. Additionally: .

Eliminate unnecessary expenses

A lot of useless little things eat up up to 40% of the budget. “Snacks” in the form of chips, salty crackers and cookies also spoil your health. The eerie earrings, bought in frustrated feelings, are thrown into the far corner of the box. The “magic” vegetable cutter is gathering dust in the corner - you don’t cook enough to use it. Men are guilty of loving new gadgets, changing their phone every year and purchasing another tablet. What about bad habits? A smoker spends about 600 USD on cigarettes. in year! Plus the cost of treatment, which will be needed sooner or later...

Keeping a list of your expenses will help you identify unnecessary expenses. Ask yourself: “Why do I need this?” when your gaze once again falls on an item of dubious necessity.

An important nuance: expenses for children (if you have them) are not considered unnecessary expenses. In addition to the essentials for them, include a “pampering” section in your budget. Pleasant surprises, joint trips to the movies and nature, and (sometimes) chocolates will not only please the kids, which is priceless in itself. Properly presented, they will lay down the need to care for your neighbor. And when old age comes, your children will delight you.

Record your main expenses

Before purchasing an unplanned item, subtract basic expenses from your total income. These include:

Payment for apartment and utilities. If you have your own apartment, it is not recommended to relax: financial planners advise setting aside an amount every month that you could spend on rented housing. It is not at all included in “free money” - later you will be able to buy a new apartment with the savings and rent it out, or give it to your grown-up children;

• Amount for food for the whole family (or you personally if you live alone);
• Expenses for a kindergarten, sports club, tutor for a child, etc.;
• Clothes and shoes that you cannot do without, as well as personal hygiene products and household chemicals;
• Gifts for loved ones if a holiday is approaching (here it is best to get an envelope and put some amount into it every month, as a result, for the holidays you will not have to cut other expenses to buy gifts).

Subtracted? The remainder is "free". It is advisable to spend it at the end of the month, on the eve of the next financial injection. Or put it aside. Save for something: starting your own business, a new apartment, a car. Yes, at least for a chic winter coat! The main thing is that the goal must be realistic.

A nuance: spontaneous purchases are real happiness for many. A financial diet, like a regular one, allows you to “zigzag”; it is important to feel moderation.

There are many options for income distribution, here is another very effective one:

50% - current expenses;

10% - “just in case fund”;

10% - savings;

20% - investments;

10% - savings for large purchases, vacations, cars.

Ensure financial circulation

It is considered normal if a person (family) can afford to save 10-25% of their income, and in their “piggy bank” they have an amount that allows them to live at their usual level for six months. Ideally, the “piggy bank” is invested in the business (for example), and, in turn, generates income. Is it still far from ideal? Start small: when writing down your expenses, get rid of, if possible, unnecessary expenses - you probably have them. Get involved in your own future. Is it worth it, for example, to wait for “sea weather” while registering with the employment fund, if you can start earning money now? Even if without work, an apartment bought after n number of years will provide you more accurately than a modest pension!

• - Some things should be taken care of in advance.

The basics of planning personal finances and family budgets that we have listed will help you sort out everyday troubles in the shortest possible time. You will be surprised to discover the presence of free funds (even if small at first) and improve relationships with loved ones (most family quarrels are related to money). Let's start planning right now?

• - from inflation, from thieves, etc. Details: .
• — let's fantasize?
• and (various subtleties)?

The functions of an economic category are a specific way of expressing the inherent properties of categories. The distributive nature of finance as its essential feature determines the distribution function as one of the functions of this economic category.

As a result of the distribution function of finance, the formation of primary financial resources (at the distribution stage) and final financial resources (at the redistribution stage) occurs for all market entities. Depending on the subjects of financial relations, distribution processes can be distinguished at the level of a) organizations; b) households; c) state authorities and local governments. They will differ both in object and in directions of distribution.

The distribution function of finance at the level of commercial organizations is manifested in the distribution of revenue from the sale of products (services) in the process of capital circulation. At the stage of primary distribution, revenue is divided into indirect taxes, wages, working capital, profit and depreciation. Thus, primary distribution occurs on the basis of the prices at which services are sold. Consequently, prices predetermine the proportions of the primary distribution of financial resources between market entities, industries and territories.

However, the final structure of the distribution of GNP between market subjects differs from the proportions implied by the price, due to the action of tax, budget mechanisms and the financial market at the stage of financial redistribution.

Redistribution processes involve the further distribution of profits and wages, as well as the use of depreciation charges using mechanisms unique to finance. Thus, part of the profit is used to pay direct taxes. The remaining net profit, being the organization's own financial resource, can be distributed for any purpose in accordance with corporate financial policy: the formation of intra-business funds (savings, material incentives, insurance, social, etc.), replenishment of its own working capital, real or portfolio investments, charity . Net profit may not be distributed, then it represents the net income balance accumulated since the formation of the organization (from the corresponding date).

Depreciation charges are involved in the investment process as a source of simple reproduction of fixed assets and are used both in stock form (if sent to the accumulation fund) and in circulation.

At the stage of redistribution, finance closely interacts with credit. Credit contributes to the rational use of temporarily free financial resources, since through credit these resources are redistributed in the financial market on the terms of repayment, urgency and payment in favor of those market entities that are experiencing there is a shortage of them.

The main source of financial resources for households is wages; after paying direct taxes, they are used mainly for consumption and social transfers. At the same time, household financial resources may be subject to further redistribution in the financial market (deposit transactions, purchase of securities).

In parallel with the described processes in the budgetary sphere, there is a redistribution of accumulated resources between levels of the budget system, links of public finance, as well as the financing of public expenditures.

The object of financial distribution in this case is tax and non-tax revenues of the country's consolidated budget. This group of financial relations should be classified as redistributive. They include interbudgetary relations and financing of state and municipal expenditures. Interbudgetary relations are associated with the distribution of taxes between the budgets of the budget system, the transfer of transfers (mainly from higher budgets to lower ones), and the provision of budget loans (see Table 1).

Table 1

Distribution of income between parts of the budget system of the Russian Federation in 2008-2010 (%) 1.

Budget financing is the expenditure of budget revenues by crediting financial resources to the accounts of state and municipal organizations, private organizations (budget lending, public investments) for the implementation of targeted expenses.

The following forms of budget financing are used:

estimated financing;

program financing;

financing to cover part of the costs, the reimbursement of which is not provided by the price of the product or service (subsidization);

financing of capital investments.

The result of the distribution function of finance is the formation of final financial resources (own and borrowed) of organizations, households and the state.

A comprehensive understanding of the nature of financial distribution can be obtained if we consider it as a whole, within the entire economic system, as the distribution of the gross national product (see Fig. 1).

The control function of finance is implemented as objective control over results of the reproductive process. Finance is associated with the distribution of the realized final product of the nation and has the ability to quantitatively reflect the results of the reproduction process through the volumes of financial resources of the economic system as a whole, economic sectors, industries, and organizations.

Financial relations make it possible to systematically control the proportions that are developing in society, the volumes of distribution of GNP (at the micro level - revenues) and thereby signal the progress and results of the reproduction process. The assessment of the volume of financial resources and their sources, as well as the structure of their use, which forms the cost proportions in the economy, occurs on the basis of financial information. The latter is represented by financial indicators contained in operational, accounting and statistical reporting.

Rice. 1. Formation of own financial resources of market entities in the process of financial distribution and redistribution of GNP

Financial performance from different angles, i.e. comprehensively characterize economic phenomena and processes. Thus, the structure of working capital makes it possible to judge not only the volume of own and borrowed financial resources invested in working capital, but also the solvency of the organization. Profitability shows not only the return per ruble of invested capital, but also the competitiveness of the organization.

The property of control, which is objectively inherent in finance, is used by controlling structures when conducting state, on-farm, and auditory financial control. The subjective factor can cause a distortion of objective conclusions, which are ensured by the control function of finance. However, ultimately, the actual nature of the distribution of financial resources will demonstrate an objective picture of the results of reproduction at the macro or micro level of the economic system.

The control function of finance operates simultaneously with the distribution function. There are no distributive monetary relations that do not have the property of control, and vice versa.

Distribution as a function of public finances

One of the functions of public finance that are associated with the regulation of real money turnover is the distribution or redistribution function. It means that through the distribution and redistribution of newly created value, national needs are met, sources of financing the public sector of the economy are formed, and a balance of budgets and extra-budgetary funds is achieved within the framework of the unified budget system of the Russian Federation. This is a condition for the integrated functioning and preservation of the integrity of the economic space of the state.

The distribution function is implemented at two stages:

• distribution stage – formation of primary financial resources;
• stage of redistribution - the formation of final financial resources.

Depending on the subjects of financial relations, distribution processes occur not only at the level of the state and municipalities, but also at commercial and non-profit organizations and households. Each level differs in the directions and objects of distribution.

Objects of implementation of the distribution function of state finances:

1. mandatory payments to the budget
2. receipts to extra-budgetary funds;
3. sources of financing the state budget deficit.

For comparison, the distribution function of finance at the micro level (of enterprises) is to distribute proceeds from the sale of goods/services in the process of capital circulation. At the first stage (formation of primary resources), revenue is divided into indirect taxes, personnel compensation, profit, depreciation and working capital. This means that primary distribution is based on sales prices. It is prices that predetermine the proportions of the primary distribution of financial resources between participants in market relations, as well as industries and territories.

Note 1

The functioning of public finances occurs on the basis of the redistribution of financial resources through a system of centralized funds. This function allows you to service reproduction processes within independent independent structures and on a state scale.

Methods of distribution of public finances

The main methods of distribution of public funds are:

• financing – gratuitous and irrevocable provision of funds;
• lending - provision of funds to government organizations on the terms of remuneration and repayment.

In addition, methods of distribution and redistribution are calculations and payments of pensions, benefits, insurance compensation, and winnings.

Figure 1. Methods of distribution of public finances. Avtor24 - online exchange of student works

Definition 1

Financing is the provision of funds for the needs of an expanded production process. It is carried out to maintain continuous and renewable production activities of state and municipal enterprises.

Government funding is directed exclusively to targeted local programs. The needs and requirements of state and municipal entities are satisfied through budgetary funds and extra-budgetary sources, which are mobilized for specific goals and objectives.

There are two types of government funding:

• Direct – direct allocation of funds for targeted programs and projects;
• Indirect – provision of tax benefits, foreign currency on preferential terms, etc.

The types, size and procedure for providing financial benefits are established by state authorities and municipalities as part of the approval of a particular target program.

Lending also provides the financial needs of expanded reproduction, only on the terms of remuneration, repayment and urgency. Government loans are provided to private organizations, but there is also lending to budgetary enterprises and institutions.

Note 2

The federal budget may provide loans to the budgets of the constituent entities of the Russian Federation for a period of one year or more in the amount provided for by the federal law on the federal budget. These types of loans do not relate to government transfers, but have a certain significance in interbudgetary relations.

A mandatory requirement for granting a budget loan is a preliminary check of the financial condition of the recipient of the budget loan. If the borrower is unable to fulfill obligations under the budget loan, the budget loan cannot be provided. If the future recipient has a previously outstanding debt to the federal budget, then this is the reason for the refusal to provide borrowed funds.

Public finances are used through settlement transactions. They are carried out in cash and non-cash forms.

Subsidies as a method of distribution of public finances

On non-refundable terms, public financial resources are redistributed in the form of: subsidies; regulatory subsidies (transfers); subventions; subsidies; compensation.

Definition 2

Subsidies are interbudgetary transfers provided free of charge and on a non-refundable basis. The conditions and directions for their use can be any

A subsidy is money allocated by the state or local budget to provide assistance to unprofitable enterprises whose profits are less than the costs of production and sales of products.

Providing subsidies to commercial and municipal enterprises gives them the opportunity to avoid bankruptcy, as well as to prevent prices from rising on the market, since part of the price of goods or services is paid through budgetary funds.

The disadvantage for the state of such a policy of distribution of financial resources is the possibility of a budget deficit. Enterprises can shift their costs into prices, causing them to increase and the company may lose customers. The state, in turn, has the right to issue the money supply, but this leads to increased inflation in the country. In this regard, subsidies, although they have a number of disadvantages, are successful in countries with an administrative type of economy. The state sets strict requirements for self-sufficiency and self-financing.