1 essence and functions of finance briefly. Finance: lecture notes (). Financial relations as a sphere of economic activity

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

education and recognition individuals for goods, services, land, etc.;
the established system of legal norms in terms of property relations;
strengthening the state as a spokesman for the interests of the whole society, acquiring the status of an owner by the state;
the emergence of socially diverse groups of the population.

All these conditions arise under one common premise: a sufficiently high level of production, increasing its efficiency, growing and exceeding the limits necessary for biological survival.

Formation, distribution and use cash income is the main condition for the emergence of finance.

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

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

Financial resources

No serious economic or political decision can be made without a preliminary assessment of the amount of money income required for this. The distribution and accumulation of cash income acquire a target character. The concept of "financial resources" appears. Being money incomes accumulated and distributed for specific purposes, financial resources are used for various social, economic, scientific, cultural, political and other purposes (Fig. 18).

Financial resources- this is the accumulated income 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 conditioned by the movement of cash income, the patterns of their movement affect finances. Incomes usually go through three stages (stages) in their circulation (Fig. 19):

Rice. 19. Stages of the movement of cash income (finance)

Finance, as we see, is related to all stages of the formation, distribution and use of cash 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, as a rule, is continuous, it is necessary to allocate part of the proceeds at the stage of selling 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. The process of expanded reproduction

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

The secondary distribution of cash income (redistribution) can occur in several stages, that is, it is of a multiple nature.

As can be seen from the schematic representation of the abstract production process (Fig. 20), any production ends with the primary distribution of money income, without which further economic development is impossible. And the distribution of money income ( D") is financed. 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 a loan, 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 to accumulation and savings. Nevertheless, there is the following financial equality, which is not violated under any circumstances:

ΣA = ΣB + ΣC,

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 realizing any goods (goods, services, etc.) into cash income is carried out at certain prices, then price dynamics has an independent effect on the distribution process. The more prices change (both upward and downward), the more money income fluctuates. These shifts are especially sharp in conditions of inflation.

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

Financial resources is that part Money, which 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 relations with every economic entity, with every citizen. In this regard, the problem arises of combining disparate 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 of the population, and pay interest on these resources. The attracted resources are provided by financial intermediaries as loans or placed in securities. Their income consists of the difference between the interest paid on the attracted resources 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 face intermediaries - dealers And brokers who are professional participants financial markets. Dealers carry out operations independently, on their own behalf; brokers act only on behalf of clients and on their behalf.

Timely financial market offers potential investors wide opportunities for investing funds by acquiring monetary obligations of a wide range of business entities. These monetary obligations called financial instruments. These include: IOUs, futures contracts, etc. A variety of financial instruments allows owners of funds to diversify their investment portfolio, that is, invest their savings in the obligations of different companies and banks. These obligations will have a different yield, but also a different degree of riskiness. If a company fails, investments in other companies will continue. Diversification investment portfolio based on the principle: "You can't 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 cash 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 monetary and serving the circulation of cash income, concern almost all individuals and legal entities. Main participants in financial relations are manufacturers of any product ( real sector economy); budgetary and non-profit organizations; the population, the state, banks and special credit and financial institutions. In the course of its development, financial relations give rise to credit and exist with them in close relationship (Fig. 22).

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

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

Credit relations arise in connection with the provision by one entity to another (physical and / or legal entities) money on terms urgency, return, 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 movement, reflecting the formation of primary, secondary and final income.

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

At the second stage from primary income direct taxes are paid insurance payments on, assistance is provided to the disabled. From the newly created funds of funds, in particular, from various levels of government, funds are paid that represent the expenses of employees not material sphere, doctors, teachers, notaries, employees, military, etc.

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

But doctors, teachers, employees, in turn, pay taxes and contribute insurance premiums. These taxes and contributions form funds earmarked for certain payments. These payments may generate tertiary income. It is almost impossible to trace the chain of their formation. The movement of these incomes is a very complex process.

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

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

At each stage of income generation, funds of funds, i.e. finances, are formed. 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.

The distribution process of 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 incomes of owners (entrepreneurs and workers), incomes of employees are formed intangible sphere. However, it should be taken into account that in reality the distribution processes are much more complicated than it is shown 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 the budgets involved in the subsequent redistribution of income.

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

Rice. 1. Distribution of added value through financial system

control function

control function consists in constant monitoring of the completeness, correctness and timeliness of receipt of income and the implementation of expenditures from all levels and. This function is manifested in any financial transaction. All these operations must not only be economically viable, but must also comply with applicable legal regulations. The control function of finance is expressed in the formation of funds of funds (budgets and off-budget funds) in accordance with the proclaimed goals and in accordance with the standards established by the legislative power. This function involves not only monitoring the processes taking place in the financial sector, but their timely adjustment in accordance with the norms of the current legislation.

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

Stimulating function

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

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

See also:

The concept and essence of finance.

Composition of finance.

Functions of finance.

The role of finance in economic development society.

1. The concept and essence of finance

Finance- a system of economic relations associated with the formation, distribution and use of monetary funds in order to fulfill the functions and tasks of the state and ensure conditions for expanded reproduction in the country's economy.

Finance, expressing the production relations that really exist in society, which have an objective character and a specific public appointment, perform in quality economic category . The peculiarity of the relations that make up the content of finance as an economic category lies in the fact that they always have a monetary form of expression.

Finance is an objective, historically established economic category that arose with the development of commodity-money relations and the emergence of the state.

Thus, finance began to express economic relations in connection with the formation, distribution and use of funds of funds in the process of distribution and redistribution of national income at all levels of management.

The area of origin and functioning of finance is the stage of the reproduction process at which the value of the social product is distributed according to the intended purpose and business entities, each of which must receive its share in the product produced. Therefore, an important feature of finance as an economic category is the distributive nature of financial relations.

Financial relations cover two spheres:

economic monetary relations associated with the formation and use of centralized monetary funds of the state, accumulated in the state budget system and state off-budget funds;

economic monetary relations mediating the circulation of decentralized monetary funds of enterprises and the population.

Finance, participating in the value distribution, are closely related and interact with such economic categories like price, salary, credit.

2. Composition of finance

IN composition of finance includes:

A) public finance;

b) finances of business entities: enterprises and population;

c) the financial market.

G public finance include:

the state budget;

local budgets;

government loan;

system state insurance;

off-budget funds;

finance state enterprises.

State finances, and, above all, the budget system, through the appropriate allocation of funds, must ensure compliance with the basic proportions in the economy, increase production efficiency, accelerate scientific and technological progress, and on this basis, increase the living standards of the population.

Finances of business entities include:

finance enterprises of various forms of ownership, which form the basis of finance. Here the predominant part of financial resources is formed;

finances of the population - relations regarding the formation and distribution family budget and making savings.

Financial market ensures the redistribution of financial resources in the economy between owners and users using the market mechanism.

At the same time, the specificity of financial markets gives rise to specific forms of financial relations:

credit- relations regarding the provision of values in commodity or monetary form by some economic entities to others on the terms of urgency, payment, repayment;

insurance- relations regarding the formation by economic entities of funds, the purpose of which is to compensate for losses arising from adverse events;

There are the following types of financial markets:

money market;

currency market;

market valuable papers;

bank loan market;

insurance market.

The distribution and redistribution of value with the help of finance is necessarily accompanied by the movement of funds, which take a specific form of financial resources.

Financial resources- cash, serving as sources of formation of cash funds.

Part state financial resources includes:

tax revenues;

non-tax revenues;

contributions to off-budget funds;

funds raised in the financial market.

Financial resources of enterprises generated from own and borrowed funds.

TO own funds include:

statutory fund (contributions of participants);

depreciation deductions(for state enterprises);

TO involved funds include:

Bank loan;

commercial credit;

bond loans;

arrears in accruals (salary and tax liabilities);

other borrowed funds.

Financial resources of the population consist of:

operating income;

property income;

savings income.

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

The formation of monetary funds takes place in a decentralized manner, and their use - in a centralized manner.

The purpose of the formation of state monetary funds is to ensure the fulfillment of its functions: management, provision of social services, social Security, implementation of state programs.

Enterprises create funds to ensure the continuity of the production process and its expansion.

The monetary funds of the population are used to meet current needs, provide for disabled people, and provide for family members.

3. Functions of finance

The essence of finance is manifested in their functions.

There are three finance functions :

Accumulating, which manifests itself in the formation of cash income and funds.

Monetary incomes and monetary funds are formed in the process of creation, distribution and use of the national income. This process has specific goals and objectives: ensuring the continuity of the production process and its expansion; solution of social issues; implementation of environmental programs and others.

By using distribution function is carried out primary, but mainly secondary distribution of GDP and national income in society.

The redistribution of national income is carried out in connection with:

intersectoral and territorial redistribution of funds;

different social groups population;

the presence of industrial and non-industrial spheres;

having different forms of ownership.

Control the function is manifested in the organization of control over the formation and use of monetary funds. Its necessity follows from the distinction between the right of ownership and the right to dispose of property in economic life.

Control is necessary both at the stage of formation of funds, and at the stage of their use. At the same time, in the process of formation of monetary funds, control is exercised over the correct and timely receipt of income from all funds (revenue, taxes, wages, interest on loans, etc.) and their distribution. When using funds from funds, the targeted nature of this use is controlled.

The tool for implementing the control function is financial information, which is contained in accounting, financial and statistical reporting.

The degree and depth of implementation of the control function is largely determined by the state financial discipline in the country - a mandatory procedure for all economic entities business transactions established norms and rules of management, the implementation financial obligations.

4. The role of finance in the economic development of society

The objective prerequisites for the purposeful use of finance in social production lie in the functions of this category.

Potentially, finance has a large opportunities to influence the economy. This is due to two circumstances. Firstly, with the fact that, being a category of distribution, finance serves the reproductive process as a whole; their sphere of influence is not limited to the area of value distribution, but also extends to other stages of reproduction. And, secondly, with the fact that finance has the potential property of a catalyst economic processes arising from their distributive nature.

Distribution, carried out by the financial method, begins in the sphere of material production. The stage of distribution is closely connected with production and directly depends on it, since only what is actually created in production can be distributed.

Functioning in the sphere of material production, finance serves the circulation of production assets and participates in the creation of new value; thanks to them, the realized value is distributed and incomes, savings and deductions are formed; on their basis, earmarked funds are formed, intended to meet various social needs.

As an economic tool of management, finance is able to quantitatively and qualitatively influence social production.

Possibilities quantitative impact for social production are determined by the volume of mobilized and distributed financial resources. It is the amount of financial resources and the direction of their use that can affect the proportions of distribution between enterprises and industries of additional means of production (provided wholesale trade them), the level of technical equipment of the enterprise, etc. By changing the amount of financial resources left at the disposal of business entities, establishing the most effective investment directions, achieving the distribution of financial resources in accordance with the declared priorities, society can influence the development of production in the desired direction.

Qualitative Impact Finance depends on the possibilities of influencing the material interests of the participants in the reproduction process, which this or that specific form of financial relations has. The qualitative impact is associated with the transformation of finance into an incentive for economic development. Such a transformation occurs if the procedure for the formation of financial resources, the conditions, principles and methods for the formation of monetary funds, the directions of their use can be organically linked with the economic interests of various business entities.

Within the framework of the use of finance in social reproduction, there are three main directions of financial impact on the processes of social development:

financial support the needs of expanded reproduction;

financial regulation of economic and social processes;

financial incentives for better performance.

The use of finance in social reproduction is accompanied by obtaining certain results, in which the role of this category is clearly manifested. The role of finance can be different depending on changes in the real conditions of their functioning, directions of influence on social production, linkages with other distribution categories, etc. But with the difference in the results obtained when using finance in different historical periods, one thing remains unchanged - the ability to influence the processes of social development with the help of finance.

Control questions

How do you understand the term "finance"?

Name the prerequisites for the emergence of finance as specific economic relations and illustrate their impact.

Compare the two terms "money" and "finance". What are their differences?

Identify and justify which of the following relationships relate to financial:

Purchasing food by a family member;

Making a decision joint stock company on a new issue of shares;

Payment by the enterprise of the supplier's invoice;

Family budget planning on the eve of vacation;

Formation of a production development fund by the enterprise;

Purchase of equipment at the expense of the production development fund;

Introduction by the state of subsidizing the cost of housing and communal services at the expense of the state budget.

What is the composition of finance? Illustrate Interaction individual elements finance on the principle of a circular flow of products and income.

What are financial resources? What is their structure for various participants in financial relations?

Illustrate the interaction of the category "finance" with such economic categories as "salary", "credit", "price".

Describe the functions of finance. How are they implemented?

What are the objective prerequisites for the use of finance in social production?

What is the quantitative and qualitative aspects of the influence of finance on social production?

What are the main directions of the impact of finance on social production?

Finance / V.M. Radionova, Yu.Ya.Vavilov, L.I. Goncharenko and others; Under. ed. V.M. Rodionova. - M.: Finance and statistics, 1995. - 432 p.

Finance: Textbook for universities / Under. ed. prof. L.A. Drobozina. -M.: UNITI, 2000. - 527 p.

B.M. Sabatini. Theory of Finance: Tutorial, 2 - ed. - M .: Publishing house "Manager", 2000. - 192 p.

1. ESSENCE OF FINANCE
Finance is a historical category. They appeared simultaneously with the emergence of the state during the stratification of society into classes. The term finansia originated in the 13th-15th centuries. in the trading cities of Italy and denoted any cash payment. Later, the term gained international distribution and began to be used as a concept associated with the system of monetary relations between the population and the state regarding the formation of state funds of funds. Thus, this term reflected, firstly, monetary relations between two subjects, i.e. money acted as the material basis for the existence and functioning of finance (where there is no money, there can be no finance); secondly, the subjects had different rights in the process of these relations: one of them (the state) had special powers; thirdly, in the process of these relations, a nationwide fund of funds was formed - the budget (hence, we can say that these relations were of a stock nature); fourthly, the regular flow of funds to the budget could not be ensured without giving taxes, fees and other payments of a state-compulsory nature, which was achieved through the legal rule-making activities of the state, the creation of an appropriate fiscal apparatus.
These are the main features of finance. According to them, one can unmistakably single out finance from the totality of monetary relations. For example, monetary relations that arise between citizens and retail trade (even under state regulation retail prices), cannot be attributed to finance, since the state here regulates monetary relations by the civil law method, for which feature is the equality of subjects (the equality of their rights and obligations), united by these relations.

Thus, finance is always a monetary relationship, but not any monetary relationship is always a financial relationship.
Based on the foregoing, we can formulate a general definition of finance.
Finances are economic relations associated with the formation, distribution and use of centralized and decentralized funds of funds in order to perform the functions and tasks of the state and ensure conditions for expanded reproduction.

Finance as scientific concept usually associated with those processes that appear on the surface of public life in various forms and are necessarily accompanied by the movement (cash or non-cash) of money. Whether we are talking about the distribution of profits and the formation of funds for on-farm purposes at enterprises, or about transferring tax payments to state budget revenues, or on contributions to extra-budgetary or charitable funds - in all these and similar financial transactions, there is a movement of funds.
Being very conspicuous, cash flow in itself does not reveal the essence of finance. To comprehend it, it is necessary to identify those common properties that characterize the internal nature of all financial phenomena - they are united by the relationships between the various participants that underlie them. social production or social relations. By nature, these relations are production (economic), since they arise directly in social production.
Economic relations are exceptionally diverse: they arise at all stages of the reproduction process, at all levels of management, in all spheres of social activity. At the same time, homogeneous economic relations that characterize one of the aspects of social life, being presented in a generalized abstract form, form an economic category. Finance, expressing the production relations that actually exist in society, which have an objective character and a specific social purpose, act as an economic category.

The financial system includes three main links: public finance, household finance and enterprise finance. Of these three links, the finances of enterprises are the main one, because the first two links are formed on their basis.
Public finances consist of two main elements: the state budget and off-budget funds.
The state budget is the annual plan of income and expenditure of the state, it is money that allows the state to perform economic and social functions (and in Lately and political). The state budget consists of the government budget and local budgets(region, city, district, village council). Therefore, the approval of state budgets for the next year is always stormy. Governments are trying to infringe on the rights of the regions, and the latter are trying to leave more funds at their disposal.
Extra-budgetary funds are those funds that are accumulated outside the state budget system and have a strictly designated purpose: Pension Fund, social insurance fund, etc.
The budget consists of two parts: revenue and expenditure. In countries with developed market economies, 80-90% of the budget revenue is formed from taxes on enterprises and the population.
The rest comes from the use of state property, externally economic activity. The structure of the expenditure part of the budget includes expenditures for social and cultural needs (health care, education, social benefits etc.), spending on the development of the national economy, on defense, public administration.
In a socially oriented economy, taxation is based on the principles of obligation to pay, social justice and links with the receipt of benefits.

Thus, financial relations cover two areas:
A) economic monetary relations associated with the formation and use of monetary funds accumulated in the state budget system and government off-budget funds;
B) economic monetary relations that mediate the circulation of decentralized monetary funds of enterprises.

The monetary nature of financial relations is an important feature of finance. Money is a prerequisite for the existence of finance. If there is no money, there can be no finance either, because the latter is a social form conditioned by the existence of the former.
In this regard, it is unlawful to attribute to finance not only monetary, but also natural relationships. The existence of natural duties in the era of feudalism, the collection of tribute by the slave state from its citizens and conquered peoples, the naturalization of social relations in a disorderly monetary circulation does not at all prove the natural nature of financial relationships. They say something else - the functioning of finance is possible only under certain conditions, the absence of which immediately narrows the boundaries of this category.
The emergence of financial relations always makes itself felt real movement Money. The absence of such movement at the stages of production and consumption of the reproductive process indicates that they are not the place where finance originated.
The real movement of funds occurs at the second from the third stage of the reproduction process - in distribution and exchange. However, the nature of the movement of value (in its monetary form) at these stages is different, which does not allow both sides to be attributed to the sphere of functioning of finance.
At the second stage, the movement of value in monetary form is carried out separately from the movement of goods and is characterized by its alienation (transfer from the hands of some owners to the hands of others) or the targeted isolation of each part of the value (within one owner). In the third stage, the distributed value (in monetary form) is exchanged for commodity form, i.e. purchases and sales are made. There is no alienation of value itself here; it only changes its form - from monetary to commodity.
At the third stage of the reproductive process, constantly committed exchange operations are served by two categories: firstly, by money as a general equivalent, and secondly, by price. No other public instrument is needed here anymore. Therefore, there is no place for finance in exchange.

The area of origin and functioning of finance is the second stage of the reproduction process, where the value of the social product is distributed according to its intended purpose and business entities. Therefore, an important feature of finance as an economic category is the distributive nature of financial relations.
The distribution and redistribution of value with the help of finance is necessarily accompanied by the movement of funds, which take a specific form of financial resources; they are formed by business entities and the state at the expense of various types of cash income, deductions and receipts, and are used for expanded reproduction, material incentives for workers, satisfaction of social and other needs of society. Financial resources act as material carriers of financial relations. The fact that financial resources belong to a specific business entity and the state allows them to be separated from the population's funds and, in particular, to draw a line between finance and wages.

The use of financial resources is carried out mainly through special-purpose funds, although a non-fund form of their use is also possible. financial funds- an important part common system monetary funds, functioning in the national economy. The stock form of the use of financial resources is objectively predetermined by the needs of expanded reproduction and has some advantages over the non-stock form: it allows you to more closely link the needs of people with economic opportunities society; ensures the concentration of resources in the main directions of development of social production; makes it possible to more fully link social, collective and personal interests and thus more actively influence production.

The most important feature of finance is that financial relations are always associated with the formation of cash income and savings, which take the form of financial resources.

2. FUNCTIONS OF FINANCE.
Finance is an integral part of monetary relations, therefore their role and significance depend on what place monetary relations occupy in economic relations. However, finance differs from money not only in content, but also in the functions performed, in which their essence is manifested. Functions refers to the “work” that finances perform.
No one denies that finance is a set of monetary relations organized by the state, in the process of which the formation and use of funds of funds is carried out. And to the question of what is the source of the formation of numerous funds at different levels, the answer, as a rule, is the same - the gross domestic product. It is possible to carry out the process of distributing GDP with the help of financial instruments: norms, rates, tariffs, deductions, etc., established by the state.
If we talk about finance in general, then, apparently, it should be considered that they perform two main functions: distributive and control. That part of finance that functions in the sphere of material production and participates in the process of creating cash income and savings, performs not only distribution and control, but also the function of generating cash income (regulating).

With the help of finance, the state distributes the social product not only in kind-monetary form, but also in value. In this regard, it becomes possible and necessary to control the provision of cost and natural-material proportions in the process of expanded production.
Actively participating in the distribution and redistribution of national income, finance contributes to the transformation of the proportions that have arisen during the initial distribution of national income into the proportion of its use. The ultimate goal of the distribution and redistribution of national income and gross domestic product, carried out with the help of finance, is to develop productive forces, create market structures for the economy, strengthen the state, and ensure a high quality of life for the general population.
The control function of finance is closely connected with the distributive one - it is, first of all, control over the ruble in the process of objectively existing monetary relations. It permeates the entire system of relations associated with both the movement of value and the change in forms of value, and represents value control through the form of ownership. Since finance expresses relationships that arise on the basis of real cash flow, then the control of the ruble as a function of finance is only the control of real money turnover.
Finance exercises control at all stages of the creation, distribution and use of the social product and national income. Their control function is manifested in all the variety of economic activities of enterprises. The ruble is controlled by production and non-production costs, the correspondence of these costs to income, the formation and use of fixed assets and working capital. It operates at all stages of the circulation of funds, in financing and lending, conducting cashless payments, in relations with the budget and other parts of the financial system.
The object of the control function of finance is financial indicators activities of enterprises, organizations, institutions.
One of the important tasks of financial control is to check the exact compliance with the legislation on financial matters, timeliness and completeness of the fulfillment of financial obligations to the budget system, tax service, banks, as well as mutual obligations of enterprises and organizations for settlements and payments.

The regulatory function is associated with state intervention through finances (government spending, taxes, loans) in the reproduction process. In order to regulate the economy and social relations financial and budgetary planning are also used, state regulation securities market.
Although finance is in the basic category, it largely depends on government policies.

3. RELATIONSHIP OF FINANCE
Finance, participating in the distribution and redistribution of the gross social product and national income, interacts with other cost (monetary) categories of distribution - price, credit, wages, insurance. These monetary categories also participate in the distribution process, as well as in other stages of the reproduction cycle. However, the extent and forms of their participation are not the same. Each of these categories occupies its own special place in the system of distribution and other reproduction relations, participating in the methods and methods inherent only to it in a single process of distribution of the social product and national income.
The price acts as the initial category of value distribution, mediating the transition of the product of labor from the natural-material form to the monetary form, and its movement from one owner to another on the basis of acts of sale. In the process of distribution, price deviations from the value determined by the socially necessary expenditure of labor may occur, as a result of which some producers realize more value, while others realize less. In this case, finances enter the redistribution process with their own methods: they withdraw part of the value (for example, with the help of excise taxes, export or import taxes, customs duties) or transfer the lost part of the value through subventions (subsidies), budgetary or sectoral financing. It should be borne in mind that the deviation of prices from value can be deliberately set by the state when pursuing a price policy (regulated prices, socially low prices, prices determined by high demand - monopoly prices). In market conditions, free prices, formed by the demand and supply of goods and services, prevail.
However, the action of the price does not cause the direct formation of funds, it acts as an instrument of commodity production and circulation. The act of exchange is both a sale (for the one) and a purchase (for the other). In case of non-equivalent sale of goods, the share of “m” decreases or increases, and in case of non-equivalent purchase, the volume and proportion of “c” and “v” of the new product change. The price affects the size and structure of the compensation fund, and hence the profit.
With the help of finance, the distribution process initiated by the price is corrected, taking into account the conditions for the movement of value, set by economic plans and proportions. If with the help of prices the proceeds from the sale of products are formed as a whole, then the financial distribution splits this proceeds into trust funds of funds intended for further use. Thus, financial methods distributions are more flexible, they provide more targeting in this process. The degree of breadth of distribution is different: if the price distributes only a part of the value in the form of its deviation from socially necessary costs or the deviation of the latter from individual costs, then finance redistributes the entire value of the product.
A special role is played by the price in determining the amount of depreciation. The gap between the original and current prices of the means of production causes
significant fluctuations in the depreciation fund. The price distortion of value inherent in production (based on non-equivalent purchase) is enhanced by non-equivalent sale and causes an increase in redistribution relations at the stages of distribution and consumption.
Finance is closely related to wages. The wage fund (wage fund) in the sphere of material production is separated from the proceeds from the sale of products with the help of finance. This fund can be formed depending on the volume of products produced. In the case of using the category of income in economic practice, the wage fund is formed in closer connection with the achieved financial results. Gross income* as the difference between the income from the sale of products and the cost includes savings on costs and is therefore characterized as a complex financial concept, which unites in monetary terms all the efforts of the economic agency in terms of quantitative and qualitative results of activities. Here there is also price factor: in the case of the sale of high-quality products, both the savings in material costs and the relative savings in the use of fixed capital, acting in the form of a decrease in the share of depreciation deductions attributable to a larger quantitative volume of products, increase profit or income.
Outwardly, it seems that the price factor is not directly involved in determining the wage fund. But through the distribution of net income, its influence is obvious. IN market system the influence of the price on the wage bill increases even more.
In the non-production sphere, the connection between finance and wages is especially clear, since the wage fund for workers in this area is formed largely from budget funds and is determined by the financial possibilities of the respective budget.
In all cases, wages, as an economic category, determine the conformity of the share of each worker in the created product, that is, the boundaries of the participation of workers in the distribution,
and finances form the wage fund or wage fund.
It uses wages at the stage of consumption, that is, by paying for goods and services. At the same time, a certain part of it is mobilized by financial methods in the form of taxes paid by the population, insurance premiums: by the credit method - in the form of deposits in banks, government bonds; by acquiring shares and other securities, holding lotteries.
At the same time, the spheres of action and motives for the action of the categories under consideration differ significantly. The effect of finance is wider than wages, since finances distribute the entire social product, while wages only distribute the necessary product and part of the surplus. Remuneration of labor is associated with the action of one of them critical factors production - work force, serves as a means of compensating for the labor expended, and finance, in addition, with the means of production, through their direct formation. Remuneration of labor stimulates the growth of its productivity, and finance affects all social production, activating its development through the system of the financial mechanism.
The interaction of finance with credit is manifested very closely. As in finance, in credit relations, monetary funds, called loan funds, are formed and used for the purposes of long-term and short-term lending to business entities, the population, and the state.
Both categories are designed to create conditions for a normal, uninterrupted circulation of funds in the public economy. The objects of the complex impact of these categories in the sphere of material production are production assets (capital). Finance and credit are the sources of formation capital investments and working capital. Financial methods, as a rule, satisfy the constant needs of economic agencies in cash, credit - temporary needs. In the future, the role of credit resources as a source of capital investments will increase.
Extension credit methods creates additional incentives for a more efficient use of financial resources, puts their spending under the constant control of banks, which increases the self-supporting responsibility of economic entities for the results of production and financial activities. Non-refundable funding should be reduced.
The relationship between finance and credit is clearly seen in the processes of formation of financial and credit resources, where the action of both categories is mutually directed: with the help of finance, credit resources of banks are formed - funds of economic agencies, depreciation deductions, part of the proceeds from the sale of products to replenish working capital, which is not immediately directed to the acquisition material resources and other means. With the help of a loan, financial resources are formed: loans replenish the financial resources of economic agencies - until the moment of repayment; bank payments to the budget from income based on the results of their activities and in a number of other cases; possible budget borrowings from banks to finance government spending.
Thus, a certain interchangeability of both categories is traced in meeting the needs of expanded reproduction.
However, there are certain differences between the categories under consideration. If finance distributes and redistributes the social product, then credit participates only in redistribution, continuing the distribution begun by finance. The object of the loan is only that part of the cost, which is this moment is temporarily free, which allows it to be accumulated in a loan fund to meet the needs of economic agencies and the population in need of funds.
A significant difference is the method of using the accumulated funds: financing involves the direction of funds in a gratuitous and indefinite manner, and lending - on the terms of repayment, urgency, payment; The most important principle of credit is the material security of loans issued.
Finance is closely related to the settlement system, since their functioning is based on mutual settlements between individual business entities. Calculations are not an economic category, they are a tool for implementing the mentioned categories. IN this case use the function of money as a medium of exchange and a means of payment. The timely execution of financial transactions, the formation of trust funds, and the unhindered advancement of financial resources in the necessary areas depend on the clarity and smoothness of calculations.
Settlements of economic entities in the sphere of material production for manufactured products, goods and services precede the action of finance and contribute to the subsequent implementation of financial relations. Specific indicators characterizing the state of settlements in the sphere of material production are accounts receivable and accounts payable. The level of this debt affects financial condition economic agencies and depends on the state of contractual discipline, the solvency of consumers. The state of settlements in the national economy is currently unsatisfactory: the amounts of non-payments on mutual settlements between economic entities and overdue debts on bank loans, wages. Failure to comply with contractual obligations is a factor of financial instability and leads to unproductive costs and loss of funds in the form of fines. This is a direct deduction from income and ultimately from the wage fund. Cash settlements are an important link in the implementation of commercial calculation and self-financing. Their normal functioning is an indispensable condition for the reproduction process and the action of cost economic categories - price, finance, credit, wages.

4. THE ROLE OF FINANCE AT THE PRESENT STAGE OF RK.

At present, the shortcomings are especially acute financial policy, restraining the economic and social development our country. These include: the dogmatic (non-creative) nature of the financial policy, its inability to quickly respond to the changing conditions of the development of our state, to find the necessary ways to solve pressing problems; lack of strategic conceptual developments; carrying out partial unreasonable tactical measures focused on momentary gain; separation of financial policy from the actual state of affairs in the national economy; violation of the most important requirement of proper financial management - to live within one's means; residual approach in determining the financial basis for meeting the social needs of citizens.
The purpose of the concept of financial policy developed in modern conditions, is to achieve more high level life of the people on the basis of the development of the economy, the all-round increase in the efficiency of social production. Social orientation financial strategy is manifested not only in the search for opportunities to increase financial resources directed to improving the well-being of the people, but also in a fundamentally new approach to main goal economic policy. The standard of living now acts as a quantity that determines the development of production, the direction and structure of the use of financial resources.
Of great importance for the recovery of the economy and expansions on this basis financial opportunities country has an attraction in its economy foreign investment. They can be carried out in various forms. World experience proves the enormous effectiveness of foreign direct investment.
Satisfaction of certain needs is ensured only subject to the availability of financial resources. This means that the financial policy is developed and carried out taking into account real financial possibilities. Expenses can only grow if financial resources increase. At the same time, the focus is shifting from subsidizing consumption to financing production. All economic and financial policy measures are aimed at enabling the population to increase their incomes, on the one hand, and creating favorable conditions for development entrepreneurial activity- with another.
In accordance with the fundamental changes in financial policy, the financial mechanism. The purpose of restructuring the financial mechanism is to increase its impact on the efficiency of social production through the development of market relations, to ensure an increase in the efficiency of the use of financial resources. The restructuring of the financial mechanism is based on fundamentally new approaches to the organization of financial interrelations in the national economy, which ensure the comprehensive development of economic initiative and the responsibility of enterprises, organizations, and regions of the country for the final results of work.
At market economy there is no need to use special financial methods to increase the interest of enterprises in the best use of production factors, strictly regulate them financial activity. Market competition forces enterprises to constantly take care of production efficiency, improve the quality of financial planning, deepen internal financial control over the use of financial resources. At the same time, the importance financial regulation market relations by the state. It is carried out by taxing the profits of enterprises (through changes in rates, tax breaks, differentiation of objects of taxation), introduction of additional taxes (for example, tax on export and import, tax on other income, VAT), taxation of income of workers, financing targeted programs. The system of financial sanctions for violation of business contracts, quality
parameters of manufactured products, for non-compliance with the requirements for the protection environment, sanitary norms and rules. The state strengthens sanctions for untimely and incomplete fulfillment of financial obligations to the budget and off-budget funds, concealment of profits and other objects of taxation. The auditing financial control.
In order to improve social services for the population, a new economic mechanism has been introduced in institutions and organizations social sphere. Financing of their needs from the budget is carried out on the basis of long-term stable standards, determined on the basis of social spending per inhabitant or other indicators. Social institutions have been granted the right to provide paid services, engage in economic activity manage their own income.
Fundamental changes have been made to the mechanism public finance. The formation of state budget revenues has been transferred to tax base; Fundamentally changed the structure of budget expenditures and the system of budget financing. The system of off-budget funds has become widespread.
The development of market relations, the improvement of management methods have led to positive results in the field of organization and management of property and personal insurance: cooperative insurance is developing, joint-stock insurance companies are emerging; new types of insurance are introduced; the ratio between compulsory and voluntary forms of insurance is changing. Improvement of the insurance mechanism is aimed at providing quality services to policyholders and increasing the efficiency of the insurance business.

CONCLUSION.
As shown, the role of finance in effective work The state's economy is huge. The role of the state in the full functioning of finance and the financial system is great. The study and disclosure of the essence of finance allows you to know where and what the taxes withdrawn from enterprises and citizens are used for, what are the causes and consequences of the budget deficit and how to overcome them, why do we need stock exchanges whether unprofitable enterprises should be subsidized or whether bankruptcy proceedings should be carried out. It should continue to study the essence of finance and their interaction with other segments of the economy.
The presence of controversial issues necessitates further development of theoretical problems of the essence of finance. A deeper knowledge of the economic nature of finance, their inherent properties will allow us to actively develop ways to better use this category in business practice, scientifically substantiate measures aimed at financial recovery of the economy and improvement of financial relationships in our country.
The clear functioning of the financial system of the state depends on understanding the essence of finance. The coherence of the work of all its links and subsystems. In addition, a good knowledge of the financial sphere of activity is necessary for our country because it is currently experiencing a deep economic and financial crisis. Without a well-functioning financial system, it is impossible to improve the economy and develop internal and external financial ties. It is necessary to improve the financial system for its more accurate functioning.
It is important to emphasize here that the problems financial recovery worry about everyone right now. After all, what is currently happening in the financial sector is closely related to the personal well-being of everyone. The amount of profit and taxes, deductions for social insurance and pensions, the price of shares and bonds, forms of investment in production and the social sphere, etc. - such issues are being discussed today not only in government circles; they deeply concern each of us.

The term finansia originated in the 13th-15th centuries. In the trading rows of Italy and at first meant any cash payment.

Finance is money and monetary relations associated with the formation, distribution and use of centralized and decentralized funds of funds in order to fulfill the functions and tasks of the state and ensure conditions for expanded reproduction.

The essence of finance, the laws of their development, the scope of commodity-money relations covered by them, and their role in the process of social reproduction are determined by the economic structure of society, the nature and functions of the state.

Finance is an integral part of monetary relations, therefore their role and significance depend on the place monetary relations occupy in economic relations. However, not all monetary relations express financial relations.

Finance differs from money both in content and in the functions performed.

Finance is an economic tool for the distribution and redistribution of gross domestic product (GDP) and national income, a tool for controlling the formation and use of funds of funds.

Their main purpose is to ensure not only the needs of the state and enterprises in cash, but also control over the expenditure of financial resources through the formation of cash income and funds.

In terms of its material content, finances are targeted funds of funds, which together represent the financial resources of the country, the main condition for the growth of which is an increase in national income. The concepts of finance and financial resources should be separated, since financial resources themselves do not determine the essence of finance, do not reveal either their internal content or their social significance.

Finance is, first of all, a distributive category.

With their help, secondary distribution and redistribution of national income is carried out.

The socio-economic essence of financial relations lies in the study - at the expense of whom the state receives financial resources and in whose interests it uses these funds.

In the process of historical development, the essence of redistribution processes has changed significantly. This, first of all, was expressed in a large share of funds allocated for social purposes. Due to the requirements scientific and technological revolution especially increased spending on education. Extra-budgetary social funds have received significant development.

Thus, finance is a distributive category. At the same time, it should be noted that distributive processes occur not only through finance, but also through the use of prices and credit.

The essence of finance, like every economic category, is manifested in their functions. Finance performs the functions of resource or fund-forming, distribution and control and regulation. These functions are performed by finance in parallel in time, since each financial transaction includes, on the one hand, the formation and distribution of the social product and national income, and on the other hand, control over this distribution.

The fund-forming function of finance is the formation of cash funds.

The distributive function of finance is connected with the distribution of GDP and its common part - the national income. Without the participation of finance, the national income cannot be distributed.

Financial relationships are created at the stages of distribution and redistribution of national income. Primary distribution is carried out according to the place of origin of the national income, i.e. in the field of material production. The distribution takes place through finances on the basis of a number of parameters set by the state, rates, norms, tariffs, payments, deductions, etc.

The control function of finance is closely connected with the distributive one. Finance exercises control at all stages of the creation, distribution and use of the social product and national income. The main purpose of control is to promote the most rational use of centralized and decentralized funds of funds in order to increase the efficiency of social production.

In addition to distribution and control functions, finances also perform a regulatory function. This function is associated with state intervention through finances (state spending, taxes, state credit) in the reproduction process.

The functions of finance are implemented through the financial mechanism, which is part of the economic mechanism.

The financial mechanism includes a set of organizational forms of financial relations in the national economy, the procedure for the formation and use of centralized and decentralized funds of funds, financial planning methods, forms of financial and financial system management, and financial legislation. In the context of deepening market reforms, a qualitatively new financial mechanism is being used. This applies to the relationship of enterprises and the population with the budget system, extra-budgetary funds, property and personal insurance bodies, etc.

Functions of Finance

So, the essence of finance is manifested in the functions they perform:

Distribution. This function is expressed in providing economic entities with the financial resources they need. By collecting taxes, the state accumulates funds in the budget, which are subsequently directed to the resolution of production and social problems, financing of economic, scientific and technical and other programs. Due to taxes, the state has the ability to redistribute part of the profits of companies and incomes of individuals. These funds are used to finance production, the social sphere, and are invested in certain industries with long-term payback.
Control. This function consists in strict control by the state of production, its distribution and exchange. In particular, government bodies authorities control the timely receipt financial resources at the disposal of economic entities in need of financing, as well as the effectiveness of the use of these funds.
Stimulation. This function of finance is to create the necessary conditions for the accelerated pace of development of individual industries and sectors of the economy, assistance in urgent social problems. These conditions are created by changing tax rates, the introduction / abolition of certain taxes and other things. With the help of taxes, sanctions, benefits, the state is trying to increase the number of jobs, investments in the growth and development of the production sector, and stimulate technical progress.
Mobilization (fiscal function). Thanks to taxes, the state has the ability to withdraw part of the income of legal entities and individuals, accumulates them in the budget and uses them for the maintenance of state structures, defense, non-productive sphere (science, culture, etc.).

public finance

It should be noted that public finances occupy a special place in the system of financial relations. Withdrawing part of the income, both private and public sector, the state creates monetary funds without providing economic entities with a commodity analogue. Such relations are gratuitous and represent a relatively autonomous subsystem integrated into the system of financial relations.

A set of interconnected links in one chain that ensure the implementation by the state of its economic functions forms the financial system. Its components:

the state budget of the country;
local finance;
finance of state enterprises;
specialized government funds.

The basis (core) of this system is the state budget (plan of expenditures and revenues of the state) - the largest centralized fund of funds, which is at the disposal of the government. The structure of revenues and expenditures of the state budget is the main content of the budget plan and it determines the direction in which the socio-economic policy of the state will develop.

Summarizing all of the above, it can be noted that finances are monetary relations that arise in the course of the distribution (redistribution) of the value of the gross social product and a certain part of the national wealth. They arise due to the appearance of income from companies and the state and the direction of these incomes to meet various social needs (material, social and others).