FEATURES OF FORMATION AND ACCOUNTING OF AUTHORIZED CAPITAL

Аннотация

This article explores the economic and legal essence of authorized capital, its formation sources and methods, and the accounting procedures involved. Special attention is given to the requirements of the legislation of the Republic of Uzbekistan regarding authorized capital and thepractical challenges faced during its formation. Keywords: authorized capital, charter fund, founders’ contribution, shares, accounting, equity, organizationalform. Authorized capital is the financial basis of any business entity. It is necessary for the enterprise to start its work, fulfill its debt obligations and ensure its responsibility to investors. The formation and proper accounting of authorized capital are important for the efficiency, financial stability and reliability ofthe enterprise. Authorized capital is a set of property, funds or other assets provided by the founders (individuals or legal entities) when a legal entity is established, which is determined by the organization's charter. The size of the authorized capital indicates the reliability of the enterprise inrelation to external investorsand lenders. Authorizedcapital serves as: •themain financial source forstarting an enterprise; •ameans of determining property relations between thefounders; •acriterion that determines thelimitof liability forthe obligations ofthe enterprise; •anelement indicatingthe financial strength of theorganization in thereports. Authorizedcapital is formed from thefollowing sources: •Cash (in national orforeign currency); •Property (buildings, machinery, vehicles, equipment); •Intangibleassets (patents, licenses, intellectual property rights); •Securities (shares, bonds, etc.). Depending onthe form oforganization, theapproach toauthorized capital differs: •In a limited liability company (LLC) -theshare ofthe founders is clearly indicated and they are liableintheamount of theircontribution. • In joint-stock companies - the authorized capital is represented by shares and is managed through themarket mechanism. •In state-owned enterprises - theauthorized capital is formed at theexpenseofstateproperty. Authorizedcapital is reflected in accounting as follows: a)Initial formation: https://ijmri.de/index.php/jmsi volume 4,issue4,2025 555 Debit:46xx–Debtors (founders' contributions) Credit:85xx–Authorized capital b)Whenadding funds: Debit:51xx–Bank account number Credit:46xx–Accounts receivable c)When adding equipment: Debit:10xx–Fixed assets Credit:46xx–Accounts receivable In cases of changes in theauthorized capital (increase or decrease), the corresponding accounting entries are also made. An increasecan beas follows: •bymakingan additional contribution; •reinvestment (at theexpense oftheenterprise's profit); •byaccounting for theassets ofthe merged enterprises. Reasons forreduction: •exitof thefounders; •optimizationofcapital; •theneed tocompensate for losses. Thesecases require amendments to thecharter ofthe enterpriseandstate registration ofthis. In Uzbekistan, several problems are observed in the formation of authorized capital by business entities: •Non-transparent valuation of real assets; •Failure offounders tomakecontributions ontime; •Sometimes contradictory or unclear legislation; •Subjectivityofvaluation when adding assets to capital. Also, the minimum capital requirement for small businesses is determined, which negatively affects theirfinancial stability. Conclusions and proposals. The correct formation of authorized capital and its accurate reflection in accounting are important tools for strengthening the legal basis of the enterprise's activities, instilling confidence in external investors, and ensuring financial control. This capital serves as a guarantee of the stability of the enterprise. The following proposals have been developed: 1.Standardizationof assessment procedures for theformation of authorized capital; 2. Review of the minimum amount of authorized capital and its adaptation to the specifics of the industry; 3.Clarification ofthe legal status oftypes ofproperty when forming capital; 4.Introduction ofasystem for continuous monitoringof thestatus ofauthorized capital; 5. Development of practical manuals for accountants in accordance with international standards foraccounting forauthorized capital.