Specialty 050509 “Finance”

Questions for the “Finance” section

The concept of finance, its necessity

Concept "finance" covers a wide area of ​​economic relations related with distribution social product in monetary form.

The external manifestation of finance in economic life occurs in the form of the movement of funds among different participants in social production. On the surface of the phenomena, this movement represents the transfer of amounts of money from one owner to another in the form of non-cash or cash payments. This feature was manifested in the origin of the term “finance”, from the Latin “finis” - end, finish, end of payment, settlement between subjects of economic relations (originally in Ancient Rome - between the population and the state). Later, the term was transformed into “finansia”, which was used in a broad sense as a monetary payment, and then as a set of income and expenses of the state and any economic units and their complexes.

Hence, obviously, finance includes that range of operations that are carried out in the form of cash payments.

As a rule, monetary payments are made among themselves by various entities participating in social production. At the same time, money serves the entire process of activity of market subjects both in the areas material production And commodity circulation, and in non-production sphere activities.

The concept of “finance” is often equated with money. This is due to the fact that at the level of public perception, money and finance are difficult to distinguish, although in essence they are different economic phenomena.

The functioning of money as an economic instrument differs from finance, both in essence and in purpose. Feature of money is that they represent a universal equivalent with the help of which the labor costs of associated commodity producers are measured. The main purpose of money expressed in their functions: measures of value, means of circulation, means of payment, means of accumulation and savings, world money.

At the same time, the presence of money in the economic system is a prerequisite for the functioning of finance. In other words, finance cannot exist without money. However, this does not mean that money is the cause of the emergence of finance.

Unlike money, finance always an intangible thing.

Feature of finance is that it is, first of all, an instrument for the distribution and redistribution of the gross domestic product.

The main purpose of finance is to provide for the various needs of subjects of society by creating cash income and funds. This is evidenced by all financial transactions performed.

The reason giving rise to the emergence of finance, is the need of the state and various entities for resources to support their activities.

For example: Subjects of non-production activities , which includes the entire social sphere: education, healthcare, culture, art, as well as areas of management, defense, etc., cannot function if they do not have the necessary amount of funds to meet their needs related to the fulfillment of public purposes.

This need for resources cannot be satisfied without finance either in the economic sphere, or in the social sphere, or in the sphere of government activities: management and defense. This is due to the fact that only with the help of finance is the distribution of value among the subjects of the reproduction process possible, that is, only through the financial distribution of the value of the gross national product does each participant in social reproduction receive its share in the created value and the movement of funds receives a target designation.

In a market economy, the range of transactions of individuals mediated by the movement of funds is expanding. In particular, citizens, engaged in various types of entrepreneurial activities without forming a legal entity, having a personal sector, household, receive income that serves as a source of covering their various needs, including those of a socially significant nature. Citizens pay various types of taxes and fees to the state budget.

Hence, the range of transactions under consideration is accompanied by the movement of funds from one owner to another, and is carried out in the form of cash payments. Therefore, these operations are to financial transactions, and the process of cash flow itself is called finances.

Based on the above, we can formulate a definition: Finance is a set of special economic relations that arise in the process of distribution and redistribution of the value of a social product, as a result of which monetary income, savings and funds are generated and used by participants in reproduction to satisfy their various needs.”

Specific signs of finance

monetary character;

distributive nature;

always expresses the one-way movement of the monetary form of value;

mandatory formation and use of financial resources.

A) On the surface of social processes, finance manifests itself through the movement of funds. Financial transactions are necessarily accompanied, firstly, by the transfer of funds from one owner to another, and secondly, by the establishment of their target designation. Consequently, finance differs from other economic categories in that it is a derivative of the monetary form of value . When performing financial transactions, their monetary shell is visible, behind which the movement of value is hidden. That is, the economic basis for the functioning of finance is the movement of value in its monetary form. This circumstance allowshighlight their monetary nature as an important specific feature of finance as an economic category.

B) Financial transactions manifest themselves not only as the movement of the monetary form of value, but also contain at their core its distribution. For example, the financial transaction “payments to the budget” is carried out by distributing the created value on the basis of isolating from it that part that is transferred to the budget in the form of various types of taxes. In reality, there is a cash payment from the subject to the state.

Consequently, in the system of monetary relations, finance is limited only to the distribution process. Therefore, the next specific feature of finance as an economic category is its distributive nature.

C) The distribution processes carried out by finance cover not only the value of the gross domestic product, but also extend to the entire gross national product, as well as part of the national wealth.

A feature of financial transactions, and therefore finance, is the fact that the movement of funds occurs unilaterally, that is Finance always expresses the one-way movement of the monetary form of value, which also characterizes its specific feature.

D) Not only finance, but also wages, price, credit, etc. take part in the distribution of the value of a social product. All these economic categories have different operating principles, each of them has its own characteristics, its own social purpose. On the basis of financial relations, a part of the value is isolated in the form of savings and specific forms of net income are isolated as part of gross income. These processes of distribution of the value of the gross domestic product are accompanied by the formation of special types of resources. Their peculiarity is that they are formed at the disposal of various entities or the state as a result of the targeted separation of funds and are intended for further use in the interests of meeting social needs. Consequently, when distributing the value of the gross domestic product with the help of finance, there is necessarily a movement of funds that take special forms of resources - income, deductions, receipts, savings, which together can be called financial resources. Hence, the next specific feature of finance as an economic category is the mandatory formation and use of financial resources.

Finance functions

Distributive function implements the social purpose of finance - providing each participant in social reproduction (both business entities and the state) with the necessary financial resources, as well as determining the directions of cash flows for their intended purpose.

Control function. The implementation of the control function of finance is reflected in the state of financial discipline in the economy.

Financial discipline- this is a mandatory procedure for all legal entities and individuals engaged in business activities, as well as officials, for conducting financial management, complying with established norms and rules, and fulfilling financial obligations.

Thus, the ability to “signal” about the progress of the distribution process is manifested through the control function of finance. The so-called “financial signals” show how the proportions develop in the distribution of funds, how timely financial resources are available to the state and other participants in the reproduction process, whether they are used economically, etc. The main requirement of financial discipline- strict compliance with norms, standards, limits, control figures and other financial parameters defined by law or enshrined in state regulations. In a broad sense, financial discipline includes fiscal discipline, payment discipline and accounting discipline. Financial discipline is an important means of promoting economic development, strengthening commercial accounting and a necessary condition for the normal functioning of finance. It is determined both by the general principles of financial organization and by the specific conditions for the functioning of finance in various structural units of social reproduction.

One of the most relevant areas of modern economic theory and practice is finance and credit. In practical activities, monetary issues are resolved every day and everywhere, but in different ways: publicly and secretly, thoughtfully and by trial, but in any case through economic relations in the conditions of interaction of certain subjects of society.

For a long time, in the economic science of the socialist period of development of our country, finance and credit were considered exclusively from the aspect of the state.

There was no private finance or credit; only personal ownership of consumer goods was asserted within the framework of generally accepted norms of socialist society. The finances of enterprises were of a conditional nature.

In foreign economic literature, on the contrary, there was a focus on describing the movement of private monetary resources and technologies for generating income. In this case, economic and mathematical methods and institutional approaches were used, which, like ideological tools, did not always lead to the desired result. Characteristic in this regard is the refusal of Western practice to monetarism as a general direction and basis of socio-economic development. All this suggests that, firstly, there are still no clear answers to many financial and credit questions, and secondly, for the positive development of society, further study of the mechanism of finance and credit is necessary.

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The ultimate purpose of finance and credit is to ensure simple and expanded reproduction of life values ​​to meet the growing needs of members of society. This is a common goal to which all cash flows of economic entities are subject.

Thus, finance and credit are a characteristic phenomenon of a market economy, the management of which primarily involves the need to develop a methodology and technique for studying them.

Methodology and techniques for studying the discipline “Finance and Credit”

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The process of mastering finance and credit, like any science, consists of a methodology (general part) and a methodology (specific part) of study. The general mechanism of knowledge of finance is as follows.

The source material of the research is practice, used, on the one hand, as source material, and on the other, and this is its main purpose, as a criterion for knowing the truth, assessing the reliability of knowledge, and a means of testing theoretical positions. Finance and credit are considered as a unity of an economic category and a subjective cost instrument for the life of society. Studying financial and credit relations in isolation from the subjects and their interests is unlawful and practically untenable. This is the first most important methodological premise.

The second premise is the thesis that a person (individual) is a primary concept, and a group, society is a collection of individuals, secondary phenomena. Therefore, when analyzing facts, the method of ascending from the part to the general, from the concrete to the abstract is used, and when checking, on the contrary, from the abstract to the concrete, particular.

A prerequisite for any analysis is the objectivity of the research. It requires that thoughts, purely personal relationships, sympathies, and social preferences remain outside the scope of science. Otherwise, when approaching a phenomenon from the standpoint of one’s own interests, the entire process of knowledge from collecting and selecting facts to obtaining results will be one-sided, subjective, i.e. unscientific character.

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Study methods depend on the level of research.

The first level is work with empirical material, selection, grouping, generalization of statistical and factual data. Statistical, sociological, economic, economic-mathematical and other techniques are used here. Possible errors at this stage are under-coverage or over-research of data. A clear description of the object and subject of study will help to avoid them. For example, there are the concepts of “tax”, “fee”, “fee”, “duty”, “deductions”. According to this terminology, when talking about taxation, we must abstract from all expressions other than taxes. But in the United States, social security contributions are considered tax payments. Hence only clear initial terminology, unambiguous concepts - the first inalienable rule for establishing the framework of an object and conducting its scientific analysis.

The level ends with a generalization of statistical material for further study of theoretical principles.

The second level is the study of material through dialectics and a systematic approach in the analysis of financial and credit relations.

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The place and role of the discipline “Finance and Credit” in the system of educational subjects

The place and role of the discipline “Finance and Credit” in the system of basic humanitarian disciplines can be traced in the aspect of the educational process of training bachelors and specialists (Fig. 1).

The first level is mastering the basic economic concepts of economic theory, general research methodology (philosophy), law and management. Here students acquire the necessary knowledge of the methodology and methodology for studying economic processes, the basic principles of macro- and microeconomics, the concept of the most important laws and categories of a market economy: production, distribution, consumption, goods, money, market, politics, law, management, etc. Of particular importance is the study of the fundamentals of people's management activities within organizations in general.

Rice. 1. Place and relationships of the discipline “Finance and Credit” in the system of basic humanities

The second level is a special study of general concepts obtained at the first level in the discipline “Finance and Credit”.

The third level is a complex of financial and credit disciplines, including financial management, taxation, insurance, investment, etc. They study individual practical issues of finance and credit for individuals, organizations and the state.

At the fourth level, knowledge and skills of financial and credit activities are used in the study of disciplines in specializations.

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Topic 1. The essence and functions of finance. Role in the system of economic relations.

Question 1. Finance as an economic category.

3. Essence, functions and role of finance

3.1. The essence of finance

The term “finance” comes from the Latin “finis” - end, ending, finish. In the Ancient World and the Middle Ages, in monetary relations between the state and the population, the word “finis” meant the final settlement, the completion of a monetary payment. Persons who paid fees to the judge, the king or various government bodies received a document called a "finis". From the name of this document came the Latin term “financia”, which meant cash payment.

In the 16th century In France, the term “finance” arose, meaning cash, income, payment. This term was used to define the totality of public income and expenditure and gradually transformed into the modern concept of “finance”.

The long process of development of commodity-money relations radically changed the content of finance. If earlier in these relations the main role was played by the monarch, the state as owners and rulers, then in the twentieth century. Citizens become the main owners of values ​​and enterprises, and the state, represented by government authorities, acts as an intermediary and consumer of redistributed benefits. All this gave the right to the American scientists Z. Bondi and R. Merton to rightly note that in the world of finance there are two main actors - households and firms that make certain decisions. 1

In conditions of limited life values 2 the continuation and development of the human race is impossible without such a social process as their redistribution from the able-bodied to the disabled. The greater the amount of value that can be redistributed.

Redistribution can be direct or indirect. The first is carried out within the framework of one form of ownership, when there are no economic concepts of “mine” and “yours”. The second occurs through the economic concepts of “mine”, “yours”, i.e. property institution. This is how parents transfer their property to children, relatives and other entities.

A kind of catalyst for distribution and redistribution relations is the dominance of commodity-money relations, the transformation of all values ​​into goods and the need for their value expression in various market commensurators (money, securities, etc.).

As a result, we observe the presence of the following phenomena:

• formation of independent economic entities and owners of values;
• widespread distribution and redistribution of life values;
• isolation and constant changes in the real and fictitious cost of life's goods.

Their interaction gives rise to a system of movement of life values ​​from one subject to another, which is the basis of finance. At the same time, money is not a direct source of additional life values, but acts as a cost shell for the formation and use of monetary resources of specific subjects of society, independent of people’s consciousness. The interaction of this shell, monetary resources and specific entities forms finance.

Thus, finance is an economic phenomenon, which is a system of formation, distribution, redistribution and use of monetary funds of subjects of society. On the one hand, this phenomenon acts as an economic category, and on the other, as a subjective cost instrument of activity.

As an economic category, finance expresses the relationship between economic entities regarding the formation and use of monetary funds. That is, finance is not only money, but the unity of three elements: at least two subjects, an object and the relationship itself. In the absence of any of them, there is no finance. The basic model of finance is the following diagram (Fig. 3.1.)

rice. 3.1. Model of the essence of finance

Subjects of financial relations in a market economy can be:

• individuals;
• family;
• organizations (legal entities);
• state;
• interstate legal entities;
• non-formal education.

The first four types form the internal system of financial objects of each country, the last three – the international sphere. Of course, real relationships are much broader and more varied. Along with legal subjects of finance, there are extra-legal, so-called informal subjects (organizing committees, clubs, lodges, “troikas”, “sevens”, etc.). They make financial decisions on the formation and use of funds from a position of strength, traditions, customs, and “gentleman’s” agreements. There are especially many such entities in the category of individuals. they form the unofficial (shadow) sphere of education and distribution of funds.

Object of finance are financial resources. They cover real and fictitious values ​​that have a monetary value. This is, firstly, money (paper, electronic, etc.), which in itself does not contain value, but is capable of personifying real material, spiritual and social values; secondly, a variety of securities (shares, bonds, etc.), reflecting the tangible and intangible values ​​of individuals, legal entities and government agencies; thirdly, the various obligations of economic entities. In this case, the assessment (cost) of fictitious values ​​may be greater, less or equal to real existing values.

The set of relationships between subjects regarding changes in an object constitute a complex hierarchical system (Fig. 3.2.).

Rice. 3.2. System of financial relations

The first group of relationships covers connections between individuals. This includes various monetary relations regarding the formation and use of funds of individuals within the circle of relatives, acquaintances, and those taking part in the life of a particular person. This area of ​​finance mediates consumption, reproduction and human development, as well as the production of life values ​​at the primary level, sometimes including acts of purchase and sale of labor and other financial issues.

The relationship of an individual with his family, which makes up the second group, is organically connected with this sphere.

The third group includes the relationships of individuals with non-state production, financial, credit, commercial and other organizations regarding the formation and use of monetary resources. This is the main sphere of relations through which, on the one hand, the generation of income in the form of wages, dividends, interest, borrowed resources, etc. occurs, and, on the other, the investment of funds in the funds of non-governmental organizations. This point is extremely important for understanding the role and place of finances of individuals. It is he who radically changes the socio-economic significance of personal finance, turning it into a basic functional element and legal basis of a market economy. The initial economic base of enterprises in a market economy under conditions of private ownership can be exclusively individual financial capital, the personal wealth of citizens. There is no impersonal joint, collective property, there is only management of joint property. Any association is based on the participation of individual owners. Hence, all partnerships and joint stock companies are, ultimately, pieces of personal finance. Accordingly, when liquidating organizations, the individual interests of shareholders and shareholders are primarily satisfied.

The fourth group of relations reflects the flow of funds between citizens and state legal entities, in which the main place is occupied by the movement, on the one hand, of payments to the budget, and on the other hand, of various targeted cash payments from government organizations (salaries of budget employees, state pensions, social benefits and etc.).

The fifth group of relations arises when there are several owners (shareholders, shareholders) of the organization and expresses the relationship between them regarding the formation of initial monetary funds and the distribution of final financial results. This is the initial and final sphere of finance of collective entrepreneurial activity.

The sixth group of relations is the monetary connections of citizens with economic entities (individuals, non-state legal entities, government agencies) of foreign countries, as well as interstate organizations and associations of countries in terms of investments, income, payments, sponsorship, etc.

The seventh group is the relations of non-governmental organizations with other non-governmental production, financial, credit, commercial and other organizations regarding the formation and use of monetary resources. Through this sphere of relations, on the one hand, the formation of dividends, interest, borrowed resources and other things occurs, and on the other, the sale of created goods and services. The last point is extremely important for understanding the role and place of finance in organizations. It is he who ensures market recognition and monetary metamorphosis of the newly created value of goods and subsequent satisfaction of the material interests of production participants - owners in income, and employees in wages.

The eighth group of relations reflects the relations between non-governmental organizations and state legal entities, in which the main place is occupied by the movement, on the one hand, of payments to the budget, and on the other, of various targeted cash payments from state organizations.

The ninth group of relations is monetary relations of non-state organizations with economic entities (individuals, non-state legal entities, government agencies) of foreign countries, as well as interstate organizations and associations of countries in terms of the purchase and sale of labor, investments, income, payments, sponsorship, etc. .d.

The tenth group of relations covers relations between the state and foreign economic entities.

The set of these relations can be classified not only by subjects, but also by:

• functional role and significance in a market economy (consumer of life values ​​and producer-consumer);
• the size and nature of funds;
• degree of plannedness of relations.

The initial, main and final relations are between individuals. Their purpose is to ensure the fulfillment of human needs, their development and reproduction through the formation and use of monetary funds. All other relations have a subordinate, auxiliary meaning.

According to the degree of planning, financial relations can be planned, forecast (indicative) and chaotic. Much is determined by the interaction of forms of ownership.

According to their social form, relationships are divided into formal and informal. Formal relations include those that correspond to the generally recognized forms (law) of society. Informal relationships are unspoken, extra-legal relationships.

The object of the relationship is the value of gross domestic product (GDP), total product, and sometimes national wealth. All this makes finance a powerful economic tool for the distribution and redistribution of the cost of life between economic entities in a society with a market economy.

Finance as a subjective cost instrument for the functioning of economic entities forms a mechanism for making decisions regarding the formation and use of monetary funds.

3.2. Finance functions

The essence of finance, like any economic category, is manifested in its functions. Finance performs two objective functions: distribution and redistribution. The purpose of finance is to distribute and redistribute the value of life values ​​from one entity to another, from the possessing and producing citizens in favor of the poor and non-producing.

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Distribution function of finance – objective and basic. The subjects of distribution are individuals and legal entities - participants in public activities, at whose disposal funds for special purposes are formed. These are citizens, organizations, the state, international structures and international entities.

The initial stage of the emergence of financial relations is the primary distribution of the value of values ​​(initial capital) of citizens to consumer, insurance and investment funds.

At the second stage, production funds and assets necessary to create new value are formed.

At the third stage, the cost of the created values ​​is distributed to the fund for the replacement of consumed values ​​(fixed and working capital), the wage fund of employees and income (profit, interest, rent) by the investor.

The three named stages constitute the primary distribution of life values ​​between owners, organizations and direct participants in production. The further process of value movement reflects redistribution function . Its essence lies in the alienation of the value of some in favor of others, as a result of which the final monetary funds of all subjects of society are formed.

Thus, the redistribution of GDP occurs between various spheres, industries and regions of the country, forms of ownership, social groups and members of society. The financial distribution method covers different levels of management.

Both distribution and redistribution in reality mean the use of funds for some subjects and the formation of funds for others.

Concerning control function execution of decisions (completeness, timeliness, etc.), then it takes place within the exclusively subjective activity of people. Sometimes control is identified with an analysis of the quality (efficiency) of management, but this is a special area of ​​financial management, like accounting, reporting, etc. The importance of the control function of finance increases sharply in the conditions of the modern stage of transition to a market economy, when the interests of subjects are placed above all else.

The content of the control function is to ensure control, firstly, over the movement and formation of the value of life values ​​in society, mainly for the full accumulation of income, and secondly, over the course of expenditure and use of funds. financial control operates during the movement of money and capital through systems and forms of payment, credit, taxation, collateral, etc.

In addition to the distribution, redistribution and control functions in the economic literature, regulating, stimulating and other functions of finance are sometimes called. They are also subjective in nature and serve as management tools. Their purpose comes down to creating relatively better financial conditions for the functioning of some subjects of society compared to others.

3.3. Functional mechanism of finance

The functions of finance are implemented through a functional mechanism consisting of cash flows from the formation and use of various funds.

Money (value) fund represents a certain amount of money (value) for a specific purpose (labor fund, wage fund, depreciation fund, reserve fund, etc.) belonging to a specific economic entity (owner).

In a market economy, there are many value funds. Their totality is divided according to a number of characteristics, including: by the circulation process, by their role in production, by subjects of relationships, etc. The most significant classification is the division of funds by functional purpose: financial resources, financial results and financial forms of expression. Here it is necessary to highlight the following main groups of funds:

• initial, basic;
• consumer;
• insurance;
• investment;
• non-current and current (assets);
• financial;
• special purpose;
• other.

Under original funds means funds that flow to an individual regardless of any of his activities. They consist of values ​​transferred by inheritance, donated by domestic and foreign economic entities, and cash receipts from state and non-state structures. Their carriers are: real estate (land, enterprises, buildings, structures, etc.), movable property (furniture, equipment, vehicles, antiques, luxury items, etc.), cash, securities, as well as intangible assets (patents, licenses and other rights).

Consumer funds– products intended for individual and public consumption.

Insurance funds– funds allocated to compensate for socio-economic losses as a result of accidents, natural and other disasters in the life of people, organizations and the state.

Investment funds- This is the initial capital invested in organizing production. In the activities of organizations they are embodied in their own means.

Non-current funds (assets)– transformation is a form of investment funds reflected in the assets of economic entities with a service life of more than one year. Non-current assets can be for consumer purposes (housing, land and other assets) and for production purposes (buildings, land and other means of production).

Working capital (assets)– a transformed form of investment funds, reflected in the assets of economic entities with a service life of less than one year. Current assets can be for consumer (food, clothing and other valuables) and industrial purposes.

Financial funds cover funds that mediate the formation and implementation of new value, as well as the transfer of embodied value (depreciation fund, wage fund, etc.).

The final structural element of finance are special purpose funds. Among them, consumption and accumulation funds play a special role. The significance of the latter is highest in the context of entrepreneurial activity, when their formation becomes a kind of criterion for the effectiveness of the functioning of finances and all productive human activities.

In addition to the above-mentioned monetary funds, many other funds arise in the process of interaction between economic entities.

The mechanism of connections and interaction of the most important funds is shown schematically in Fig. 3.3.

Rice. 3.3. System of the most important financial funds

In Fig. 3.3. the general direction of the movement of financial resources from the original initial capital through the production sphere to special-purpose funds is clearly visible, part of which (accumulation and reserve funds), while maintaining the patterns of circulation, returns to the original level. Moreover, the faster the turnover of funds, the less initial capital is required.

The arrows in the diagram indicate the functioning processes (metamorphosis, transformation, distribution, formation, etc.) of monetary resources. They are based on cash flows that form the “circulatory system” of finance. By cash flow we mean the movement of value from one entity to another. In this case, the fund of the first is used (distributed, transformed, etc.); the second – is formed (formed). Accordingly, relative to the fund of an economic entity, flows can be positive (inflows) and negative (outflows). If funds are the statics of finance, expressing the relations of owners, then cash flows are their dynamics, transformation. Funds and flows always function in unity. Some cannot exist without the other.

Cash funds and flows are always in motion. Stops make them lifeless and unnecessary. Paper and metal money themselves are not consumed, and electronic money is completely absent.

The described functional mechanism of finance refers to the internal objective content of finance. It receives its real expression in finance as a subjective cost instrument of the life activity of subjects and consists of financial policy, financial law and financial management.

3.4. The role of finance in a market economy

To determine the role of finance, one should trace the impact on society of distribution and redistribution cash flows.

The role of finance in the life of subjects of a market economy is different. Much depends on traditions, customs, natural-historical and specific characteristics of consumption and production.

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The main meaning of finance is the distribution and redistribution of life values ​​between individuals. At the same time, in developed countries the following basic requirements are met:

• ensuring the minimum means for production participants necessary for the existence and reproduction of the labor force;
• providing every poor person with a minimum subsistence level;
• maintaining the material interest of owners in investment activities;
• maintaining a scientifically based optimal ratio between the incomes of 10% of the poor and 10% of the rich population.

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The foundations of the process of distribution of newly created value are laid in the production of life values. At the same time, monetary relations become forms of functioning of individual elements and necessary connections of reproduction.

Each reproduction cycle begins with financial resources and is repeated in the future only after the value created in production and realized in the exchange process is subject to distribution (and redistribution), as a result of which targeted monetary funds are formed - the basis for satisfying various needs.

Financial relations are associated with both real and formal cash flows. The absence of real money movement at the stages of direct creation and consumption of life's goods indicates that it takes on an internal, formal form.

Financial relations begin with the movement of the value of real monetary resources during the formation of conditions and factors of production. Next, value sheds the cash form of money and is embodied in other potential forms.

At the distribution stage, the product created by society is first divided into a share of consumption and accumulation, and then each of these parts is subject to further distribution. The remainder is distributed between the owner of the means of production and hired workers. As a result, the created value in society goes through the first stage of distribution.

The stages of exchange and consumption are possible only after the distribution stage. Each participant in the reproduction process divides his part of the income into a consumption fund and an accumulation fund.

At the second stage, the movement of value in monetary form is characterized by its alienation (transition from the hands of some owners to the hands of others) or the targeted separation of each part of the value (in the hands of one owner). Here there is a one-way (without counter equivalent) movement of the monetary form of value.

At the third stage of reproduction, the distributed value (in monetary form) is exchanged for commodity value (D-T), i.e. acts of purchase and sale are carried out.

In equivalent exchange there is no finance: exchange transactions are serviced by three categories: goods, money and price. However, an unequal exchange (a watch worth 1000 rubles for a box of matches worth 1 ruble) certainly hides a significant financial point, which consists in a conscious or unconscious redistribution of value between the counterparties of the transaction 3 .

Thus, finance mediates the entire reproduction process from the formation of conditions for the creation of values ​​to their consumption. However, they play the greatest role at the stage of distribution and redistribution, during which the value of the social product is distributed according to its intended purpose and business entities, each of which receives its share of the produced product.

The process of cost mediation of social reproduction is carried out using various economic categories, including money, price, depreciation, profit, wages and others. Let's look at the main ones.

Price serves as an economic instrument through which the value of a product receives monetary expression and becomes an object of distribution. The price predetermines the proportions of the future cost distribution, but cannot carry out distribution among the subjects of ownership, functional isolation (allocation, isolation) of various parts of value. An exchange must take place and a distribution of value must take place before all parts of value receive concrete embodiment in certain quantitative proportions. Thus, the process of forming various parts of value can be divided into two stages.

At the first stage, the advance cost is transferred and potential income (wages, profits) is created. At the second stage, the real allocation of the compensation fund (depreciation, working capital) and primary income is carried out. Here, along with price, depreciation, wages, and profit are involved.

Wage expresses the value relations that arise in the process of distributing newly created value as a result of the formation of individual incomes of workers, depending on the quantity and quality of the labor expended by them.

Therefore, the wage fund, like depreciation, as well as profit, represent different areas of finance.

Thus, the role of finance in a market economy is extremely large. The reproduction of values ​​and the entire life activity of people depend on the nature of their functioning.

print version

FINANCIAL POLICY OF THE STATE

(36 lecture hours)

LECTURE 1.

In modern practice, financial policy is interpreted in two ways:

in a broad sense, it is a concept of relations, a system of principles for the protection and implementation of the interests of some subjects as opposed to the identical interests of others

in a narrow sense, a set of actions by a subject to achieve certain goals.

Regarding the second, this is not much different from management, and therefore seems quite controversial.

Any policy is conditioned by two objective conditions:

limited life values

division of humanity into many different entities

Moreover, restrictions apply not only to material resources, but also to intangible ones (power, fame, feelings, knowledge, etc.), i.e. they are not enough to satisfy all possible human needs.

From the fact that humanity consists of many different subjects, and not of a homogeneous mass, an objective social phenomenon arises policy as a relationship between at least two subjects regarding any object (material, social, spiritual, sensory, and other life values, consisting of a system of principles of protection and implementation the interests of some subjects as opposed to the identical interests of others.

Before we move directly to the consideration of the financial policy of the state, it is necessary to understand the essence, functions and role of finance in the system of monetary relations of society with a market economy

1. The socio-economic essence of finance.

In modern society, the term “finance” is used quite widely and quite often: state (public) finance, enterprise finance, financial markets, financial resources, financial management, financial policy, etc.

However, there are different opinions regarding the origin of the term “finance” as an economic category.

The medieval Latin term "finatio" was used in the 13th and 14th centuries. in the meaning of “obligatory payment of money”, “monetary debt obligation”. The word “finance” is similar to the English “fine” - “a monetary penalty, a fee for a privilege.” In France in the 16th century. this word was used in the meaning of “state revenues”, “sums of money”.

In the historical aspect, all theorists are unanimous only in the opinion that the concept of “finance” is associated with the state and appeared in the process of centuries-old development of commodity-money relations:

Finance has historically emerged as a mechanism for ensuring the activities of the state as an institution necessary for society, since it helps to accelerate the economic development of society as a whole.

Initially, in economic life, finance manifested itself in the form of economic relations between households and producers, on the one hand, and the state, on the other, regarding the redistribution of part of the monetary income of business entities in favor of the state, as well as the use of funds thus formed.

Having emerged in the 18th century, finance felt the impact of the rapid transformation of money.

At the turn of the 20th-21st centuries. commodity markets and factor markets fade into the background, giving way to the money market.

Thus, it can be stated that:

The formation of finance is directly related to the formation and development of the state

Finance is directly related to the development of money and relationships between economic entities that are carried out with the help of money

Of particular importance for understanding the role of finance in the national economy are the patterns of development of the money market itself, in which people develop and implement special tools and innovations that bring cash flows from the real world to the Internet.

Ultimately, finance became distinctive enough to emerge as a theory of finance within macroeconomics.

Such relationships may arise:

Regarding the redistribution of society's income in favor of one of them

To ensure adequate execution by the state of the functions that society needs

In the process of unequal exchange based on debt obligations under conditions of uncertainty and risk.

Finance that ensures the functioning of the state is called public finance. With the redistribution of society's income in favor of households and producers, finance arises for households and commercial organizations (firms, corporations), respectively.

For clarity, let us imagine the national economy as a system of elements - economic entities (producers, consumers, financial intermediaries), with a center - the state and a structure formed by interrelations. These relationships can be monetary, where money mediates the movement of tangible assets in equivalent sales transactions. As a result of such transactions, there is no redistribution of society's income in favor of one of the entities at the expense of the other, and therefore, there is no finance as a mechanism for such redistribution.

Financial relationships between business entities arise in a situation where money is moved without an equivalent in the form of tangible or monetary assets only on the basis of the obligations of one of the parties to the transaction. Thus, the population and enterprises pay taxes to the state in cash in exchange for the state's obligation to fulfill its functions. As a result of such transactions, the company's income is redistributed in favor of one of the partners in the transaction.

Thus:

Finance as a subjective cost instrument - these are monetary relations between economic entities, including the state, as a result of which the income of society changes its structure, increasing in the hands of one entity due to the withdrawal (unequivalent) of this part from another.

Moreover, if the form of assets changes from monetary to commodity during an equivalent exchange between economic entities, then since these relations are monetary, they can hardly be classified as financial.

In other words, finance is a mechanism for the unequal redistribution of society’s income in favor of one of the subjects at the expense of another, in order to ensure that he (the subject) can perform the functions that society needs; it is a mechanism for maintaining that social institution, without which society would be less effective .

Thus, the essence of finance is quite multifaceted, which is also expressed in the versatility of its functions.

2. Functions of finance. Functional mechanism of finance.

Exists positive theory of finance, which answers the question: how does this happen, and normative theory of finance, answering the question: how it should be.

According to positive theory Finance performs the following main functions:

Redistribute the income of society in favor of one of the economic entities at the expense of another

They contribute to the formation of a fund of funds of the state or an economic entity.

We can say that finance contributes to the preservation of only those social institutions that support the forward movement of society.

According to normative theory The main functions of finance are manifested in such functions as:

Redistributive, changing the structure of national income

Regulating, changing the motivation of business entities to achieve the goals of society at one or another stage of its development

Monitoring, evaluating and comparing the effectiveness of using redistributed funds in order to change the parameters of such redistribution.

From the point of view of this theory, the functions of finance represent a mechanism through which the state can influence the behavior of economic entities.

The normative theory of finance assumes that if state intervention in the socio-economic system is necessary and society as a whole benefits from this, then a mechanism for the redistribution of funds in favor of the state should be objectively formed to ensure the functions assigned to it.

Question: how much money does the state need for the efficient functioning of the economy? What indicators to choose to evaluate the effectiveness of government spending and determine the “golden mean”? etc

The efficient use of finances by the state ensures adequate development of society. The reduction in real income in the country directly indicates the ineffectiveness of the state, the insolvency of finance as a mechanism for redistributing society's income in favor of state institutions. In this case, it may be advisable to use finance to redistribute society's income in favor of private businesses or households. (the so-called theory of “failures”, i.e. inefficiency of the state or market).

Thus, subjective functions (manifest exclusively within the subjective activity of people) – control, regulatory, stimulating.

Objective functions of finance – distribution, redistribution.

The objective functions of finance are realized through functional mechanism, consisting of cash flows from the formation and use of various funds.

Funds are divided according to a number of characteristics: by the circulation process, by their role in production, by subjects of relationships, etc.

Main groups of funds:

initial, basic (material property of citizens)

consumer

insurance

investment

financial

non-current and current assets

special purpose, etc.

4. The role of finance in the activities of a society with a market economy. Financial resources.

Financial resources represent financial object.

Financial resources are a rather complex economic category that cannot be completely identified with cash.

Financial resources is a quantitative characteristic of the financial result of the reproduction process for a certain period. These are the funds that can be legitimately used to replace retired fixed assets, industrial and non-productive accumulation, and collective consumption. This macroeconomic indicator has a balance sheet nature, since it can be presented as a sum of both income and expenses.

Subjects financial relations in the modern world can be:

citizens

organizations (legal entities)

state

interstate legal entities (transnational and international organizations)

unification of states

informal organizations (collectives)

The original the main and final ones are the relationships between individuals. All other relationships are subordinate, auxiliary.

By degree of planning financial relations can be systematic, predictive (indicative), chaotic.

By social form - formal and informal

Object financial relations is the value of GDP, sometimes national wealth.

1. Financial policy (7)

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Section 2. Finance

Law of money circulation

The law of money circulation was formulated by K. Marx. In his work “Capital,” K. Marx gave a scientific explanation of the relationship between such economic indicators as the money supply, the sum of prices for goods and services, credit, mutual and non-cash payments, and the velocity of money circulation. The law can be represented by the formula: KD = SCT-K-P-VP/ C

where CD is the amount of money needed for circulation;

MCP – the sum of prices of goods and services sold;

K – the sum of prices of goods sold on credit;

P – amount of payments on obligations;

VP – the amount of mutually extinguishable obligations;

C is the turnover rate of the currency unit of the same name.

The basic principle of monetary circulation follows from the law of monetary circulation - limiting the money supply to the needs of trade turnover. The amount of money an economy needs depends on the following three factors:

The number of goods and services sold on the market;

Price level of goods and tariffs;

Velocity of money circulation.

The amount of money in circulation primarily depends on the number of goods in circulation. The greater the number of goods circulating in a country, the more money, other things being equal, is required to service trade turnover. Money supply growth targets are determined for a target period, for example, a year in advance, but can be adjusted during the specified period. When setting targets, the Bank of Russia is guided by the following main indicators: projected growth of GNP in real terms; estimated velocity of money circulation in the forecast period; the maximum permissible level of price growth.

The term “finance” comes from the Latin word “finansia”, which means “money payment”. The long process of development of commodity-money relations has changed the content of the phenomenon of finance.

Finance– these are economic social relations, the subject of which are the processes of accumulation, distribution and use of funds in the process of using the social product and income.

Monetary relations turn into financial ones when, as a result of the production of goods and the provision of services during their sale, funds of funds are created. Funds of funds created at the level of the state and local governments are called centralized funds, and funds created at the level of business entities and households are called decentralized.

Finance as a subjective cost instrument for the functioning of economic entities forms a specific mechanism for making decisions regarding the processes of formation and use of monetary funds. The object of finance is financial resources, which are a set of funds of funds at the disposal of business entities, the state, and households, i.e., it is money that serves financial relations. They are formed in the process of material production, where new value is created and gross domestic product and national income arise.

Finance is a set of social relations formed in real money circulation during the formation, distribution and use of funds of funds.

Finance expresses economic relations related to the provision of sources of financing to the state, municipal and private sectors of the economy, spheres of production, circulation and households. The functioning of finance is aimed at the effective development of a socially oriented economy. Finance contributes to the achievement of general goals of economic development, which requires its optimal organization.

The main participants in financial relations are:

1) state;

2) economic entities;

3) population.

Main features of public finance:

1) monetary relations between two entities (where there is no money, there can be no finance);

2) subjects have different rights, one of them (the state) has special powers.

3) in the process of these relations, the state budget is formed;

4) regular receipt of funds into the budget is ensured by law.

The market economic mechanism forms and implements a system of economic relations:

Directly between business entities - producers and consumers (sellers and buyers) of goods and services;

In the sphere of production and circulation;

Between business entities (taxpayers and the state);

In the financial and budgetary sphere - between economic entities (employers and employees);

In the field of labor relations.

Economic entities have many faces and function simultaneously as:

Producer and consumer in the market of goods and services;

Borrower and investor in the financial market;

In a market economy, 3 specific main markets interact:

1) market for goods and services;

2) labor market;

3) financial market.

All three markets are in constant interaction, performing specific functions of the market economic system.

The functioning of finance as an economic category is necessarily associated with the action of objective economic laws.

At the present stage, such essential characteristics of finance as the social orientation of financial relations are especially emphasized, which enhances the importance of issues of clear interaction between all participants in financial relations in a market economy.

In the world practice of developed countries, there are two main models of market economies that ensure the economic and social progress of society, differing primarily in the degree of state regulation of the economy.

The essence of a particular model is determined by the economic and social role of the state in the development of society. The tax capacity of production and income depends on which model of the market economic system is implemented in post-socialist states.

Finance is an integral link between the creation and use of national income of countries. Finance affects production, distribution and consumption and is objective in nature. They express a certain sphere of production relations and belong to the basic category.

The role of finance in the economy is constantly increasing, reflecting the increasingly complex redistribution relations in society.

Centralized funds of funds are created through the distribution and redistribution of national income created in sectors of material production. These include:

1. state budget;

2. off-budget funds.

Decentralized funds of funds are formed from the cash income and savings of the enterprises and the population themselves. They are the basis of the financial system, since it is in this area that the predominant share of the state’s financial resources is formed. Part of these resources is redistributed in accordance with the norms of financial law into budget revenues of all levels and into extra-budgetary funds. At the same time, a significant part of these funds is subsequently used to finance budgetary organizations; commercial organizations in the form of subventions, subsidies, and is also returned to the population in the form of social transfers (pensions, benefits, scholarships, etc.).

Among decentralized finance, the key place belongs to the finance of commercial organizations. Here material wealth is created, goods are produced, services are provided, and profit is generated, which is the main source of production and social development of society.

The characteristic features of finance are:

1. the distributive nature of the relationship, which is based on legal norms or business ethics, is associated with the movement of real money, regardless of the movement of value in commodity form;

2. one-way (unidirectional), as a rule, the nature of cash flow;

3. creation of centralized and decentralized funds of funds.

The essence of finance is manifested in its functions: distributive, control and stimulating. At the same time, distribution and control functions are interconnected and are performed simultaneously.

Distribution function of finance. When distributing national income, basic, or primary, incomes are created, the amount of which is equal to national income. Formed during the distribution of national income among participants in material production, these incomes are divided into two groups:

1. wages of personnel employed in the field of material production;

2. income of enterprises in the sphere of material production.

But since the state also has other areas and industries where national income is not created, it is necessary to allocate funds for their development. These are industries such as, for example, the defense industry, education, health care, management, social security and maintenance of depressed areas. To ensure these monetary expenses, with the help of finance the state withdraws part of the income created in the sphere of material production, directing it to other spheres. This results in a redistribution of national income with the active participation of finance. In particular, in our country, the redistribution of national income occurs in the interests of structural restructuring and development of agriculture, transport, energy, conversion of military production and in favor of the least affluent segments of the population.

Control function of finance. The control function is to ensure financial control over the distribution of gross domestic product and national income among the relevant funds, as well as their expenditure for their intended purpose. Control covers both the production and non-production spheres, although income is not created in it. The purpose of financial control is to ensure the rational and economical use of material, labor and financial resources, natural resources and the reduction of unproductive expenses and losses.

The control function of finance is ensured by the multifaceted activities of financial authorities: employees of the financial system, the treasury, and the tax service who exercise financial control. Control can be national, departmental, intra-economic and public.

An independent type of control is audit.

The Ministry of Finance of Russia and its local authorities play an important role in the implementation of financial control.

Stimulating function of finance. This function of finance allows the state, with the help of various financial levers, to influence the development of enterprises and entire industries in the direction required by society. Such levers of influence on economic processes are:

1. Budget, funds from which are allocated for the development of a specific industry or facility;

2. Prices and tariffs, which even in a market economy allow the state to influence the financial condition of companies through government intervention in the pricing mechanism;

3. Taxes, which, as the most powerful financial instrument, allow stimulating production at a low level, and slowing it down at an excessively high level;

4. Export-import duties, which, due to low, preferential or high levels, make export-import transactions unevenly profitable.

The simultaneous impact of several financial levers greatly enhances the effect on production development.

Financial resources- this is the totality of all funds that are at the disposal of the state, enterprises, organizations, institutions for the formation of the necessary assets in order to carry out all types of activities both at the expense of income, savings and capital, and at the expense of various types of income. An important component of financial resources are banking resources.

Financial resources are intended:

1. to fulfill financial obligations to the budget, banks, insurance organizations, suppliers of materials and goods;

2. incurring costs for expansion, reconstruction and modernization of production, acquisition of new fixed assets;

3. remuneration and material incentives for enterprise employees;

4. financing other costs.

Financial resources are divided into:

Centralized funds (state budget, extra-budgetary funds);

Decentralized financial resources (enterprise funds).

There are also financial resources of the state, regions, and enterprises.

The main source of formation of centralized funds at the macro level is national income. On the basis of the distribution and redistribution of national income, centralized funds of funds are formed. Part of the national income is generated and remains at the disposal of enterprises, that is, decentralized financial resources are created at the micro level, which are used for production costs.

The main source of financial resources of an enterprise is its profit from production activities.

The use of financial resources is carried out mainly through special-purpose monetary funds, although a non-fund form of their use is also possible.

The financial resources of the state and enterprises are the direct objects of financial management, that is, the management of their formation, use and movement of cash flows.

The availability of sufficient financial resources and their effective use predetermine the good financial position of the enterprise, solvency, financial stability, and liquidity. In this regard, the most important task of enterprises is to find reserves for increasing their own financial resources and their most effective use in order to improve the efficiency of the enterprise as a whole. Effective formation and use of financial resources ensures the financial stability of enterprises and prevents their bankruptcy.

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: