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ИД «Финансы и кредит»






International Accounting

Separate accounting for financial performance of public procurement contractors

Vol. 22, Iss. 8, AUGUST 2019

Received: 22 July 2019

Received in revised form: 31 July 2019

Accepted: 5 August 2019

Available online: 15 August 2019

Subject Heading: Managerial accounting

JEL Classification: М40

Pages: 846–858


Ivashkevich V.B. Kazan (Volga Region) Federal University (KFU), Kazan, Republic of Tatarstan, Russian Federation

ORCID id: not available

Subject The article discusses whether modern methods and foreign practices of management accounting can be used to evaluate the profitability of public procurement orders.
Objectives The research determines the specifics of public procurement orders and contracts in terms of their substance, placement and performance, specifics of costs, accounting methods and costing of supplies, fair and reasonable prices, profitability scenarios based on separate accounting data.
Methods The research is based on methods of systems approaches, analysis and evaluation of the existing practice, abstraction, generalization, analogy and modeling.
Results I analyzed the existing rules for general and separate accounting for financial and business performance as is in public procurement contractors. I suggest the entities should adhere to direct costing principles, classify costs as variable and fixed, assess value added by order and contract in a more comprehensive and advanced way. This will make prices and rates for public procurement services and goods more reasonable, thus not only recovering the contractor's costs, but also developing production and technological capabilities. I focus on accounting for costs and results of public procurement orders by cost centers of administrative personnel, which is technologically based on computer-assisted systems for business data processing.
Conclusions and Relevance A contract should be used as an accounting item of public procurement contractors' financial performance. Accountants should trace production and selling expenses, liabilities, tangible and intangible assets associated with each contract. Respective income and expenses are assessed with the accrual method. Direct costs for any public procurement order should account for the extent to which they correlate with the percentage of work to be completed. Indirect costs should be posted to cost centers of relevant managers. Thus, entities will get new analytical opportunities for separate accounting, fitting it into governance and control functions. The findings can apply to theoretical issues of financial and management accounting and financial performance, contribute to suggestions and recommendations for improving the existing separate accounting rules for financial performance of public procurement contractors.

Keywords: separate accounting, public procurement, contract price


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