Organizational and methodological support for accounting and auditing of the investment real estate transactions

Abstract

The article examines modern accounting methodologies that effectively capture investment real estate operations in financial reporting. Taking into account the growing importance of the real estate market as an investment tool, the requirements for the quality of financial reporting of companies that carry out real estate transactions are increasing. The article examines modern accounting methods that allow to effectively reflect transactions with investment real estate in accounting. Special attention is given to defining the taxation principles of investment real estate and their impact on financial reporting. During the analysis, numerous challenges in the area of real estate taxation, especially concerning the fair value assessment, have been identified.  Particularly, issues related to calculating tax differences and the specific inclusion of the balance value of such real estate in the calculation of the 10% repair limit have emerged. As a result of addressing this aspect, it has been recommended to comprehensively describe assessment methods in the appendices to the annual financial reports, providing a thorough explanation of the choice of this approach to prevent potential issues with tax authorities. The article also examines auditing methods for investment real estate operations with the aim of enhancing the reliability of financial reporting and detecting potential risks and deficiencies in accounting practices. This has led to the assertion that the subject of accounting requires more detailed attention than is typically provided in the audit process. Consequently, a plan and program for conducting an audit of operations related to investment real estate have been developed, enabling a comprehensive assessment of the state and movement of this asset within the enterprise. Summarizing the research results, the article provides practical recommendations for the organizational and methodological support of accounting and auditing operations involving investment real estate. These insights can be valuable for professionals in the fields of accounting, auditing, management, and all stakeholders involved.