ACCOUNTING AND TAX ASPECTS OF THE ACTIVITIES OF HOUSING AND CONSTRUCTION COOPERATIVES IN UKRAINE

Abstract

Housing and construction co-operatives (HCC) are one of the forms of self-organisation of potential home buyers and one of the legally established methods of financing the housing construction process, the mechanism of which provides for the registration of built housing as private property and, accordingly, has its own legislative restrictions and peculiarities that affect the structure of accounting and taxation of the main activities of such co-operatives. The property of the housing and construction co-operative consists of share capital (reflecting the expected value of a shareholder's participation in the co-operative's activities, i.e., the value of residential real estate) and indivisible funds (used to ensure the HCC's operational activities). The formation of co-operative property has its own accounting features and special documentation requirements. The construction of residential real estate by housing and construction co-operatives is carried out with the help of a general contractor who has a licence and the appropriate technical and human resources for construction. The HCC duly documents and records the transfer of project documentation, fixed assets and materials to the general contractor. Further construction, payment for work performed, and acceptance of completed housing are also properly documented and reflected in the accounts. After the house is accepted on the balance sheet from the general contractor, the house becomes its property, and the shareholders receive the right of ownership and use, and, with the consent of the co-operative, the right to dispose of the apartment they will occupy in the co-operative's house. The classification of expenses and their reflection in accounting is a matter of debate, in particular the expenses for the remuneration of the director and accountant of the co-operative, payment for utilities, depreciation of office equipment, etc. To achieve its main objective, the HCC subsequently sells housing to its shareholders, usually through an exchange, i.e., by returning the share to the co-operative member and selling them an apartment for the amount of the returned share. In most cases, based on the specifics of the HCC, its income equals its expenses, which does not create any obstacles for such co-operatives in the tax field.