commercial concession with concessions, which are regulated by Chapter 40 of the
Commercial code.
The main legal documents that regulate the relationship of franchising
(commercial concession) is the Civil code of Ukraine and the Commercial code of
Ukraine, namely Chapter 36 of the Commercial code of Ukraine "Use in business of
the rights of other business entities (commercial concession)" and Chapter 76 of the
Civil code of Ukraine "Commercial concession".
According to the current legislation, the contract of commercial concession
(franchising) – one side (right holder) undertakes to provide the other side (user) for a
period of time or without determining the term of the right to use in the business of the
user a set of rights owned by the right holder, and the user undertakes to comply with
the terms of use of the rights granted to him and to pay the right holder a fee stipulated
in the contract [3].
Thus, certain aspects of franchising relations are regulated by the current
legislation, but there are no normative documents that determine the order of reflection
and formation of accounting information of franchising operations.
As a result of the lack of a clear approach to accounting for this type of transaction,
a number of scientists believe that the franchise should be considered as intangible
assets, other scientists hold to an opinion that this is the cost of sales, these approaches
form a variety of accounting information, which is significantly different, resulting in
more complicated analysis of the activities of enterprises and comparison of financial
information.
As a result of franchising such objects of accounting emerge:
-
intangible assets-intellectual property (created by own efforts skill and
knowledge (recipes and technologies)), the right to conduct activity, the use of
economic and other privileges;
-
accounts receivable-long-term right of monetary claim to the franchisee, the
current debt of the franchisee to pay the franchise;
-
deferred income-long-term right of monetary claim against the franchisee;
-
operating income-income from the provision of a franchise accrued for the
reporting period;
-
Obligations -long-term payment obligation of the franchisee;
-
distribution costs-the costs of royalty payments, the cost of training and
retraining, the costs of establishment of the brand;
-
deferred expenses-start-up expenses.
Taking into account the above objects of accounting, when forming the
accounting policy on franchising operations, it is necessary to take into account the
requirements containing the provisions (standards) of accounting that determine the
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