FORMATION OF THE FINANCIAL RESULTS AND PROFIT MANAGEMENT: DISTRIBUTION AND USE

Abstract

The aim of the article was an exploration of the impact of the accounting policy elements on the financial results of the enterprise. The focus of the study was a positive financial results (profit) distribution and use. The method of the exploration was a collection and a systematization of the existing explorations and academic research papers. The next steps of the study were a synthesis of the most crucial aspects of the recent research and formatting a system of the profit management complied with the order of formation of the net financial results based on the National Principle (Standard) of the Accounting of Ukraine number 1. The practical importance of the exploration results lies in the field of accounting-and-analytical support creation for management planning, analysis, and decision making, particularly, the decision on the efficient distribution and use of the profit. The system developed was adjusted to the major factors of the profit distribution policy development. Among the factors the system was adjusted to there were the following: enterprise life cycle curve, the volume of the profit gained, sums and volume of the dividends that were paid out in the previous periods, the enterprise objectives set. Among the explored directions of the profit distribution there were payment of dividends to shareholders; royalty payment; capitalization of profit, directing it to increase own capital and reserves. Based on the legislative guides of the profit distribution and the requirements associated with the formation of the reserves for the support of the sustainable development growth and the needs for financing of the separate aspects of enterprise activities the profit should be distributed across three main groups of expenses: for payments to owners; to ensure economic development; to ensure social development. The study also covers the importance of following the principles of revenue and expense recognition to determine the financial results, as well as the tasks of developing criteria, evaluation methods, the order of data generation in the accounting system.