Audit and economical analysis

Theme 11. Own capital components and its analysis

 

1.Purpose and tasks of the analysis of private equity.

2.The structure of private equity: charter capital (authorized capital), added capital, reserve capital and unallocated profit.

3. Analysis of Private Equity and its Change.

Dynamic analysis of private equity.

5. Source Asset Review. Analysis of Private Equity (Profitability)

6. Analysis of indicators of the financial leverage.

 

Purpose, content, tasks and sources of information for the analysis of private equity

 

Liberalization of the economy, modernization of production and innovative development require not only economical but also financially sound support. Therefore, in evaluating the financial potential of economic entities, the importance of their own funds, their share in the total capital structure, and the boundaries that are in line with the commitments are of great importance.

Specific capital concepts and definitions are set out in the "Conceptual Framework for the Preparation and Presentation of Financial Statements" and "Accounting Policies and Financial Reports" approved by the Ministry of Finance of the Republic of Uzbekistan.⁶⁹

Private equity (capital) is the assets of the subject after deduction of liabilities. Obligations of the subject - the obligation of the subject (the debtor) to transfer the property in favor of the other subject (creditor), for example, transfer of property, performance of work, payment and other obligations or to abstain from certain actions, and the creditor is obliged to demand from the debtor is right.

Assets are economic resources that are controlled by the entity and are subsequently derived from earnings from earnings.

Thus, the following definitions and sections can be accessed by the following link:

Private Equity (EC) = Assets (A) - Liabilities (M)

Private equity capital, added, inventories are capital and non-distributed profits. Where necessary, the statutory, consolidated, reserve capital is analytically considered.

The amount of private equity in the balance sheet is dependent on the valuation of assets and liabilities.

The private equity is comprised of the charter fund (charter capital), the added, the reserve capital and the undistributed profits.

The authorized fund (charter capital) reflects the sum of contributions (expressed in money) specified in the constituent documents. Tangible and intangible assets entered into the charter fund (charter capital) shall be assessed in accordance with the agreement between the founders (participants) and shall be assessed by the Valuation Organization in cases provided by law.

The included capital reflects the emission income from the initial sale at the higher of the nominal value of shares, as well as the difference in the course of formation of the authorized fund (charter capital) expressed in the foreign currency.

The reserve capital reflects the inflationary reserves generated from the recalculation of long-term assets, the deduction from net profit in the amounts provided by the legislation and constituent documents, as well as the cost of free property.

Undistributed profit represents the accumulation of profits and can be added to the charter fund (charter capital) by the decision of the proprietors.⁷⁰

Forms of enterprises, regardless of the authorized capital (fund) the amount of the enterprise of founding documents amount will be equal . Its quantity does not change over the year.

The purpose of the private equity analysis is to examine the main sources of the formation of private equity and to identify the effectiveness of their use.

The main objectives of private equity analysis are:

- formation of the database (data collection, reproduction, use, disposition of information) necessary for examination ;

- assessment of the compliance with the legislation and the statutory norms of the undertaking;

- assessing private equity and its structural and dynamic changes;

- study of the level of effective utilization of private equity;

- capacity building and capacity building of private equity.

Private capital carrying out the analysis of sources of information, others 'balance' and 'private equity on the report forms.

The accounting balance sheet reflects the information on equity and its components, at the beginning and the end of the period, at the fair value recognized.

In the accounting balance, its capital and its disclosure classify the information reflecting the financial position of the undertaking, which can assist users in financial reporting. The total balance of the private equity must be disclosed in the balance sheet.

The disclosure of information about equity and ordinary shares is made up of 14 NAS. All business entities ( except banks and budget organizations ) must comply with the requirements of this Standard during the preparation and disclosure of equity information.

The report on own capital (equity) provides information on its own capital, dividends generated for repayment and repayment.

The purpose of the report is to disclose information on the status of private equity at the beginning and the end of the reporting period and changes in its structure during the reporting period.

The explanation of the report on the equity capital is contained in information about the withdrawal of the participant's private capital, the acquisition of shares or cancellation of the shares, reduction of the nominal value of the shares or other reasons.

An explanatory note to the report on the equity of the report is drawn up in accordance with the requirements set out in the "Accounting policies and financial reporting" in the National Accounting Standard (NAS No. 1).

In the description of private equity, stock companies provide information on:

a) total and nominal value of shares subject to subscription;

b) the aggregate amount and nominal value of shares outstanding when compared to the amounts specified;

c) total amount of funds received during the subscription;

d) shares in the charter capital of certain types and categories;

d) amount of unpaid dividends per preferred share;

e) the dividends payable on shares, in particular the number and the value of the paid-up shares, and their types or categories;

j) about the crashing or mergers occurring in the reporting period, and the nominal value of the shares before and after the crash or merger.

The total amount of funds received during the subscription is shown as follows:

a) with indication of all cash assets and stocks, which are credited to the shares;

b) the price of the property, as a payment for shares, with indication of the number of shares;

c) the total amount of foreign currencies, the number of shares and the rate of the foreign currency denominated indebtedness.

Information on shares in the composition of the charter capital is provided in specific types and categories:

a) number of issued shares with indication of unpaid part of authorized capital;

b) nominal value of shares;

c) changes in the number of shares outstanding during the reporting period;

d) rights, privileges and restrictions on shares including restrictions on the distribution of dividends and the return of the capital;

e) shares belonging to the company, its subsidiaries and affiliates;

f) the list of founders and number of shares they own;

g) the number of shares owned by the members of the executive body;

h) with indication of options, their terms and sums, for options and other contracts;

i) the number and nominal value of the shares (stocks or shares) convertible and possible liabilities in case of conversion of these shares into debt securities.

All other undertakings provide the following information in the financial statements:

a) distribution of the share capital of owners;

b) rights, privileges or restrictions on those shares;

c) changes in the composition of ownership interests in the share capital.