Finances and their functions. Finance as an economic category. Financial system: links, areas of financial relations Financial policy: types and tasks

For the emergence 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 premise: sufficient high level production, increasing its efficiency, growing 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 to expand production takes the following forms: payment of current material costs, depreciation of equipment, rent, interest on loans, wages for workers involved 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 the 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 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 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: , IOUs, futures contracts, etc. Variety financial instruments allows owners of funds to diversify their investment portfolio, i.e., 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 investment portfolio is carried out according to 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 monetary income.

Phenomenon financial relations as a sphere of economic relations in society, it 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 manufacturers of any products ( real sector economics); 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 one entity to another (individuals and/or legal entities) money on 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: state-established indirect taxes included in primary income. Therefore, at this stage, government revenues are partially generated.

At the second stage, from primary income direct taxes are paid, insurance payments on, assistance is provided to the disabled. Funds representing employee expenses are paid from newly created funds of funds, in particular from various levels of government. immaterial sphere, doctors, teachers, notaries, office workers, military, 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 contribute insurance premiums. 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 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 appears at 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 off-budget funds) in accordance with the declared goals and standards established by the legislative branch. This function involves not only monitoring processes occurring in 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 income generation budget system and spending of budgets and extra-budgetary funds. Financial control subdivided into preliminary, current and subsequent. Preliminary control is carried out at the stage of forecast development budget revenues and expenses and preparation of 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, provisions can be made tax incentives 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.

2. FUNCTIONS OF FINANCE AS A DISPLAY OF ITS ESSENCE

1. Distributive function finance is that:

– through the distribution and redistribution of newly created value, national needs are met, sources of financing the public sector of the economy are formed, and a balance of budgets and extra-budgetary funds is achieved within the framework of the unified budget system of the Russian Federation;

– the newly created value is subject to distribution in order to fulfill the monetary obligations of enterprises to the budget, banks, and counterparties. Its result is the formation and use of centralized funds of funds, the maintenance of the non-productive sphere of the economy.

The main objects of implementation of the distribution function of finance are mandatory payments to the budget and extra-budgetary funds, as well as sources of financing the budget deficit. The process of redistribution of income between different levels of budgets plays a special role.

2. control function finance is to implement control over the real ruble money turnover, in which the state is a participant, through the formation of centralized funds of funds. Ruble control has two forms:

– change control financial indicators, the status of payments and settlements;

– control over the implementation of the financing strategy.

In the first case, a system of sanctions and rewards is applied, using coercive or incentive measures. In the second case, we are talking about the implementation of a long-term financial policy, in which the main attention is paid to anticipating changes and adjusting the order and conditions of financing to them in advance. Constant changes and updates in the financial system require an adequate response to this from all branches of government.

The control function of finance always has a specific form of manifestation. It can be directed to a budget of a certain level, an extra-budgetary fund, an enterprise or institution, etc.

Control function of government and municipal finance is implemented in the following main areas:

1) control over the correct and timely transfer of funds to centralized funds;

2) control over compliance with the specified parameters of centralized funds of funds, taking into account the needs of industrial and social development;

3) control over the targeted and effective use of financial resources.

Many modern economists There are also other functions of finance. They are subjective in nature and serve as management tools.

Regulatory function is closely related to state intervention through finance in the reproduction process.

Stimulating function state and municipal finance is to ensure the development of various spheres of public life through a system of benefits and economic programs.

Fiscal function of finance is associated with supporting unprofitable but necessary sectors of the economy. It is carried out using many methods and techniques (investing, taxation, limiting, etc.).

3. ROLE OF FINANCE IN SOCIO-ECONOMIC DEVELOPMENT OF SOCIETY

The role and importance of finance changed at different stages of the development of society. In market conditions enterprises are endowed with greater independence in the distribution of sales proceeds and the use of financial resources. During primary distribution, with the help of finance, funds are created to compensate for the means of production consumed in the production process. In this case, enterprises can choose one of several methods for calculating depreciation, a form of non-cash payments when paying for raw materials, calculate the optimal stock of working capital, and choose a strategy for financing core activities.

After deducting the expense reimbursement fund from the cash proceeds, paying certain tax payments At enterprises, a wage fund is created, and the remaining part of the proceeds represents the net income (profit) of the enterprise. After paying tax payments levied on the budget, enterprises can distribute the remaining net profit at your own discretion. With the help of finance, enterprises create trust funds of funds used for social and economic development.

During secondary distribution or redistribution, the state budget and extra-budgetary funds are formed. With the help of these funds it is carried out financial regulation and stimulation of production, national programs are financed, the maintenance of the non-production sphere, defense and management, the concentration of financial resources is achieved in the main areas scientific and technological progress. Serving the process of distribution of national income, finance acts as an important economic lever for improving the proportions between the accumulation fund and the consumption fund, as well as within them. With the help of finance, financial resources are redistributed between the territories of the country, economic sectors, and divisions social production. By redistributing between sectors of production, finance contributes to the accelerated development of priority sectors, which, in turn, ensure the development of scientific and technological progress. The redistribution of funds between territories helps to equalize their economic and social development.

It is impossible without financial participation social development society, since funds for financing all social activities are obtained from the distribution of national income through the budget and social extra-budgetary funds. The entire non-production sphere is financed from the budget, and funds are allocated for social security.

IN modern conditions The role of finance in the socio-economic development of society is manifested in the following main areas:

– intensification of the policy of accumulation of domestic capital;

– use of budgetary and tax policy in order to develop the economy and strengthen it;

– state support for industrial investment and financing investment programs ensuring the preservation and development of the country’s scientific and technical potential;

– use of financial market opportunities for production investment purposes;

– strengthening the social orientation of the state budget;

– achieving social justice in relation to various categories, layers and social groups citizens.

4. GENERAL CHARACTERISTICS OF FINANCIAL RESOURCES

Financial resources are the most important source of expanded reproduction, social economic development society. Increasing the volume of financial resources– one of the most important tasks of the state’s financial policy. A decrease in the volume of financial resources has a negative impact on the development of society, leads to a reduction in investment, a decrease in consumption funds, and creates imbalances in the distribution of the social product and national income. The influence of financial resources on the economic development of society is not one-sided. In turn, the composition and volume of financial resources depend on the level of economic development of the state and on the efficiency of production. The economic growth serves as the basis for increasing the volume of financial resources, and the amount of financial resources allocated to the expansion and development of production helps to increase its efficiency.

It is necessary to distinguish between centralized financial resources of the state and decentralized financial resources of enterprises. Decentralized financial resources are formed in the form of various national funds, primarily the budget and extra-budgetary funds, the funds of which are used to implement the most important functions of the state, such as the development of the national economy, financing of socio-cultural events, meeting defense needs and maintaining the political superstructure of society. The sources of centralized financial resources are national income and partly national wealth in the case of its involvement in economic circulation and effective use, borrowed and raised funds.

The main sources of financial resources of enterprises are profit and depreciation, as well as borrowed and raised funds. The volume of decentralized financial resources depends on the same factors as the volume of centralized ones, but their value is also influenced by the degree of centralization. The emergence and development of the financial market gives business entities new opportunities to expand the composition of financial resources and increase their volume by issuing securities, using borrowed funds from various credit institutions and commercial loans, placing temporarily free funds on deposits in commercial banks and etc.

The formation and use of financial resources can be carried out not only in fund, but also in non-fund form. Centralized financial resources are formed and used primarily in the form of cash funds, which include, for example, the budget, social insurance fund, road fund, fund for the reproduction of the mineral resource base and other extra-budgetary and special funds consolidated in the budget. At the enterprise level, financial resources can be created and used in both stock and non-stock form.

The volumes of financial resources of the state and enterprises are directly dependent, since the source of the formation of state budgetary and extra-budgetary funds is the gross domestic product created by economic entities.

5. FINANCIAL RESOURCES OF THE STATE AND ENTERPRISES, THEIR COMPOSITION AND STRUCTURE

State financial resources are part of the financial resources of the national economy, which include financial resources of the production and non-production spheres, as well as the population. The main sources of formation of the state’s financial resources are national income, borrowed and raised funds, income from the state’s foreign economic activities, and partly national wealth. Most of the state's financial resources are concentrated in the centralized fund of state funds - the state budget, which makes it possible to finance the state's performance of its functions.

In recent years, the state's financial resources have been largely replenished through government borrowing in the domestic and foreign financial markets. This method of increasing the volume of financial resources can be considered effective, provided that there are possibilities for timely repayment of public debt.

Financial resources are the material basis for the functioning of the state, and most of them are created during the distribution of national income. Financial resources are mobilized in state centralized funds of funds by tax and non-tax methods, with the overwhelming majority being accumulated by the state through taxes.

Part financial resources of enterprises includes own, borrowed and attracted funds. The own financial resources of enterprises include profit, depreciation deductions, statutory and Extra capital, as well as the so-called sustainable liabilities of the enterprise, including sources of financing that are constantly in circulation of the enterprise, for example, reserves formed in accordance with the constituent documents of the enterprise or legislation. TO borrowed funds include loans from commercial banks and other credit organizations, and other loans. Attracted financial resources are funds raised by issuing shares, budgetary allocations and funds from extra-budgetary funds, as well as funds from other enterprises and organizations raised for equity participation and for other purposes.

The structure of financial resources of enterprises varies depending on the organizational and legal form of the enterprise, its industry and other factors.

Despite the differences in the composition and structure of financial resources of individual enterprises, in their total volume by manufacturing enterprises The largest share is occupied by own funds.

The structure of financial resources changed along with the development of the economy. In the conditions of a command-administrative economy, the share of the financial resources of domestic enterprises was occupied by funds from the state budget and loans State Bank USSR, enterprises did not have the opportunity to use such sources of financial resources as issuing securities, attracting foreign investment, loans from commercial banks. The development of the financial market gives enterprises new opportunities to expand the composition of financial resources and increase their volume.

6. FINANCIAL MARKET, ITS STRUCTURE AND ROLE

Financial market is a market in which the redistribution of temporarily free funds is carried out between various economic entities through transactions with financial assets.

Different authors include different components in the composition of the financial market. The most frequently mentioned sectors of the financial market are the securities market and the credit market. Quite often, the financial market includes the following markets: foreign exchange, gold, and insurance.

When analyzing trends in the development of the financial market, practitioners, as a rule, analyze such segments as the securities market, credit and foreign exchange markets.

When identifying financial market segments, it is assumed that their common property is the redistribution of temporarily free funds, which makes it possible to combine these segments under the general name “Financial Market”. At the same time, each of these segments has its own characteristics, which distinguishes them into separate components of the market.

Thus, in the securities market, transactions are made with such a specific product as securities, through their purchase and sale or other civil transactions. The issuer, by issuing securities, attracts additional funds, and the investor, purchasing these securities, expects to receive income or pursues other goals (for example, when purchasing ordinary shares– acquire voting rights in the management of the company). In this case, the investor can sell these securities on the market.

Acts of purchase and sale are not carried out on the credit market, and, having concluded loan agreement, neither the lender nor the borrower can sell it. Credit organizations attract temporarily available funds and then issue them on credit, thus redistributing them. A distinctive feature of this market is the fact that redistribution in in this case carried out on the principles of lending, i.e. repayment, urgency and payment, and through intermediaries, mainly through banks. Business entities can lend to each other directly, bypassing banks, but in this case they must have economic ties with each other, and lending is carried out upon the supply of goods (commercial loan).

Transactions with foreign currency values are carried out on the foreign exchange market. TO currency values include: foreign currency and securities denominated in foreign currency. This is the most liquid market. object foreign exchange market are any financial requirements, expressed in foreign currency, and the subjects are financial and investment institutions. Foreign exchange market entities carry out the following types of operations: hedging (insurance of open currency positions), arbitration interest rates, purchase and sale of currency through cash (spot) and forward (forward) transactions, as well as swaps (simultaneous implementation of purchase and sale transactions with different execution dates).

The financial market and especially the securities market, or stock market, are not only a means of redistributing financial resources in the economy, but they together constitute a very important indicator of the state of the entire financial system and the economy as a whole.

7. FINANCIAL SYSTEM AND CHARACTERISTICS OF ITS LINKS

Financial system represents a set of different spheres or links of financial relations, each of which is characterized by features in the formation and use of funds of funds, a different role in social reproduction.

The financial system of Russia includes the following links of financial relations: 1) national finances (state budget, extra-budgetary funds, state credit); 2) insurance funds; 3) finances of enterprises of various forms of ownership.

The above links are usually divided into centralized and decentralized spheres of financial relations.

National finances – This centralized funds monetary resources that are created through the distribution and redistribution of national income created in sectors of material production.

Insurance links The financial system uses other forms and methods of formation and use of monetary funds, which are characterized by decentralization processes.

Enterprise finance are also represented by decentralized funds of funds of economic entities of various forms of ownership, generated from the cash income and savings of the enterprises themselves.

The financial system is a unified system since it is based on a single source of resources for all links. Uniting the basis of a unified financial system are enterprise finance.

Plays a major role in national finances the state budget, which is a centralized monetary fund and ensures that the state performs its inherent functions. The main and main source of formation of the state budget is taxes from enterprises and the population.

In addition to the state budget, in any economy, off-budget funds, where are the funds concentrated? federal government and local authorities related to financing expenses not included in the budget. According to their economic content, extra-budgetary funds are divided into two groups - social and economic off-budget funds. The formation of extra-budgetary funds is carried out through mandatory target contributions.

An important element of general public finance is state loan. State credit is a special form of monetary relations between the state, individual citizens, legal entities and individuals, as well as foreign states and international organizations regarding the formation and use of a loan fund.

State debt represents the entire amount of issued but not repaid government loans with interest accrued on them as of a certain date or for a certain period.

Insurance funds provide social protection society, compensation for losses from natural Disasters and accidents, and also contribute to their prevention.

A special place in the financial system is occupied by finance of enterprises and organizations, that are the basis of the country's unified financial system. They serve the process of creation and distribution of social product and national income. Their economic condition determines the degree of provision of centralized funds with financial resources.

8. FINANCIAL POLICY: TYPES AND OBJECTIVES

The set of government measures to use financial relations for the state to perform its functions represents financial policy.

1) development of a general concept of financial policy, determination of its main directions, goals, main tasks;

2) creation of an adequate financial mechanism;

3) management financial activities state and other economic entities.

Basis of financial policy constitute strategic directions. Objectives of financial policy directed:

1) to provide conditions for the formation of the maximum possible financial resources;

2) establishing a rational, from the state’s point of view, distribution and use of financial resources;

3) organization of regulation and stimulation of economic and social processes using financial methods;

4) development of a financial mechanism and its development in accordance with the changing goals and objectives of the strategy;

5) creation of an effective and business-like financial management system.

home goal of state financial policy– the most complete mobilization of financial resources and increasing the efficiency of their use for the socio-economic development of society.

An important part of financial policy is the establishment financial mechanism.

The most important directions of state financial policy are: budgetary, tax, investment, social, customs policy.

Budget policy states must first of all be considered as a set of measures to implement the interaction of budgets at different levels. The main task in budget policy was and remains to strengthen public finances, reduce the budget deficit, and create favorable financial conditions for the development of sectors of the national economy.

Tax policy represents the activity of state authorities and local self-government for the forced withdrawal of part of the income received by economic entities and the population in order to form the revenue side of the corresponding budgets.

Investment policy is a set of measures to create conditions for attracting domestic and foreign investment, primarily in the real sector of the economy. The main objective of this policy is to create conditions for investors to make it profitable to invest financial resources into the Russian economy.

Social financial policy primarily related to problem solving financial support the rights of Russian citizens established in the Constitution of the Russian Federation. Currently, social financial policy covers pension policy, immigration policy, financial assistance policy for certain social groups of the population, etc.

Customs policy is a symbiosis of tax and pricing policy, limiting or expanding access to the domestic market for goods and services and encouraging or discouraging the export of goods and services from the country.

Financial policy enterprises represents the purposeful activities of financial managers to achieve business goals.

9. FINANCIAL MECHANISM AS AN INSTRUMENT FOR IMPLEMENTING FINANCIAL POLICY

An important component of financial policy is the establishment of a financial mechanism through which all state activities in the field of finance are carried out.

The financial mechanism is a system of forms, types and methods of organizing financial relations established by the state. Financial mechanism– this is the outer shell of finance, manifested in financial practice. The elements of the financial mechanism include financial resources, methods of their formation, a system of legislative norms and standards that are used in determining state income and expenses, organizing the budget system, enterprise finance and the securities market.

The financial mechanism is the most dynamic part of financial policy. Its changes occur in connection with the solution of various tactical tasks, and therefore the financial mechanism is sensitive to all the features of the current situation in the economy and social sphere of the country. The same financial relationship can be organized by the state in different ways. Thus, the relationship that arises between the state and legal entities regarding the formation of the budget can be built on the basis of collecting taxes or non-tax payments. The financial mechanism is divided into directive and regulating.

Directive financial mechanism, as a rule, it is developed for financial relations in which the state is directly involved. Its scope includes taxes, government credit, budget expenditures, budget financing, organization budget device And budget process, financial planning.

In this case, the state develops in detail the entire system of organizing financial relations, which is mandatory for all its participants. In some cases, the directive financial mechanism may extend to other types of financial relations in which the state is not directly involved.

Such relations are of great importance for the implementation of either the entire financial policy (corporate securities market), or one of the parties to these relations - an agent of the state (finance of state-owned enterprises).

Regulatory financial mechanism determines the basic rules of the game in a specific segment of finance that does not directly affect the interests of the state. This type of financial mechanism is typical for the organization of intra-economic financial relations in private enterprises. In this case, the state establishes general order use of financial resources remaining at the enterprise after paying taxes and other mandatory payments, and the enterprise independently develops forms, types of funds, directions for their use.

Financial management presupposes purposeful activities of the state associated with the practical use of the financial mechanism. This activity is carried out by special organizational structures. Management includes a number of functional elements: forecasting, planning, operational management, regulation and control. All these elements ensure the implementation of financial policy measures in current activities government bodies, legal entities and citizens.

The essence of finance. Finance is an economic category of commodity production. Monetary nature of financial relations. The place of finance in the system of commodity-money relations. Boundaries of finance in the sphere of commodity-money relations. Specific signs of finance. Financial resources as material media financial relations. Definition of finance.
The relationship of finance with other economic categories in the process of cost distribution. Financial and price methods of cost distribution; their common features and differences. Finance and wages, their interaction. General and specific in the functioning of finance and credit in the distribution process.
Section 1.1.1 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 arising between the state (king, judges, etc.) and the population, the word finis meant final settlement, completion of monetary payment. Persons who paid fees in favor of the judge, the king or various government bodies received a document in their hands - “fine”. From the name of this document came the Latin term “financia”, which meant cash payment.
In the 16th century, the term “finance” arose in France, meaning cash, income, payment. This term was used to define the totality of public revenues and expenditures and gradually transformed into modern concept finance.
The long process of development of commodity-money relations radically changed the content of the phenomenon of finance. If earlier in these relations the main role was played by the monarch, the state as owners and supreme rulers, then in the second half of the 20th century citizens became the main owners of values and enterprises, and the state, represented by the authorities, acted as an intermediary and consumer of redistributed values. Most domestic economists of the socialist period of the 20th century rightly saw the essence of finance in the distribution and redistribution of monetary funds, but irrationally associated them, firstly, with expanded reproduction, and secondly, with the state.
To understand the existing variety of definitions, it is necessary to clearly trace the history of the phenomenon of finance.
In conditions of limited life values, the continuation of the human race is impossible without such a social process as their redistribution from the able-bodied to the disabled. The more a person produces surplus product, 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“mine”, “yours”. The second occurs through the economic concepts of “mine”, “yours”, this is a socially affirmed transfer of the values of one economic subject (owner) to another, i.e. public institution of property.
A unique catalyst for distribution and redistribution relations is the development and establishment of the universal dominance of commodity-money relations, the transformation of all values (material, spiritual, social, sensory, etc.) into goods and the need for their value expression in various market commensurators (money, securities, etc.) .d.).
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 value of material goods.
Their interaction gives rise to an objective system of movement of life values from one subject to another, which represents the prototype, the basis of finance.
How does this sphere function, what is this phenomenon? How are financial resources generated and spent? The answers to these and many other questions related to monetary funds form the subject of the study of finance. The object is personalized economic subjects: a person, a team, a state and other structures.
Money performs various functions and, above all, the role of a measure of the utility of goods, a universal means of exchange and payment. They are not a direct source of additional life values, but act as an objective, independent of people’s consciousness, specific form, the cost shell of the formation and use of monetary resources of specific subjects of society. The organic interaction of this shell, monetary resources and specific entities forms finance.
Thus, finance is an objective 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 hand, it is 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 an organic unity of three elements: at least two subjects, an object and the relationship itself. In the absence of any of them, finance as a category and phenomenon does not exist. The basic model of finance is the diagram in Fig. 1.1.

Rice. 1.1. Model of the essence of finance

Subjects of financial relations in a modern market economy can be: 1) citizens (individuals), 2) family, 3) organizations (legal entities), 4) state, 5) interstate legal entities (transnational and transnational organizations), 6) associations of states , 7) informal organizations (collectives). All of them become official counterparties if they have the legal authority provided for by the relevant legislation.
The first three (1-4) types form the internal system of financial entities of each country, the last three (5-7) - the international sphere. Of course, real relationships are much broader and more varied. Along with legal subjects of finance, there can be and exist non-legal, so-called informal subjects (organizing committees, clubs, lodges, “troikas”, “sevens”, etc.). They accept financial solutions on the formation and use of monetary funds from the positions 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.
The object of finance represents financial resources. They cover the entire set of real and fictitious values that have value expression. 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, patents, insurance, etc.), reflecting the tangible and intangible values of individuals, legal entities and government agencies; Thirdly, various obligations economic entities. In this case, the assessment (value) of fictitious values may be greater, less or equal to real existing values (the material content of national wealth, GDP).
The set of relationships between subjects regarding changes in an object constitutes a complex multifaceted hierarchical system (Fig. 1.2).
1st group. Financial relations of citizens cover connections between individuals - individuals. This includes various monetary relations regarding the formation and use of funds of individuals within the circle of relatives, acquaintances, who take an active or passive part in the activities of a particular person. This area of finance mediates consumption, reproduction and human development, as well as the process of production of life values at the primary level, sometimes including acts of purchase and sale of labor and other characteristic financial aspects of a market economy.

Rice. 1.2. System of financial relations
The relationship of an individual with his family, which makes up the 2nd group, is organically connected with this area.
The 3rd 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, revenues are generated in the form of wages, dividends, interest, borrowed resources, etc., and on the other hand, investing funds in initial funds (fixed capital, etc.) is not government organizations. The last point is extremely important for understanding the role and place of personal finance. It is he who radically changes the socio-economic significance of personal finance, turning it into a basic functional element and legal basis market economy. The initial economic base of enterprises in a market economy under conditions of private ownership can be exclusively individual financial capital, personal fortune citizens. There is no impersonal joint, collective property, there is only management of joint property. Any association is based on the participation (share or full) of individual owners. Hence all the partnerships and joint-stock companies are ultimately pieces of personal finance. Accordingly, when liquidating organizations, the individual interests of shareholders and shareholders are satisfied first and last.
The 4th group of relations reflects the flows 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, of various targeted cash payments government organizations (salaries of budget employees, state pensions, social benefits and etc.).
The 5th 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 ( initial capital) and distributions of final financial results. This is the initial and final sphere of finance of collective entrepreneurial activity.
The 6th group of relations is the monetary connections of citizens with economic entities (individuals, non-state legal entities, government agencies) foreign countries, as well as with interstate organizations and associations of countries in terms of investments, income, payments, sponsorship, etc.
7th group - 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, etc. occurs, and on the other, the sale of created goods and services. The last point is 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 the subsequent satisfaction of the material interests of production participants - owners in income, and employees in wages.
The 8th 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 9th group of relations are monetary connections of non-governmental 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.
The 10th 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 a) functional role and importance in a market economy (consumer of life values and producer-consumer); b) the size and nature of monetary funds; c) the 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. 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, illegal relationships (racketeering, theft, robbery, looting, etc.).
The object of the relationship is the value of 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.