Methods of accounting and tax recognition of investment income: char-acteristics, comparative analysis, ways of improvement

One of the components of business entities profit, which is a goal of any commercial enterprise, is a result of investment activity. The article analyzes the notion of investment income and its composition and characterizes the currently used method of investment income accounting, the provisions of International Financial Reporting Standards in respect of the recognition and assessment of investment income, as well as the rules for its inclusion into the tax base for income tax. Taking into consideration the shortcomings and contradictions revealed in the current legislation, the author sets a goal to identify measures to improve the method of investment income accounting which will improve the quality of accounting information for the assessment and performance of investment activity. Scientific approaches and methods were used in the re-search, in particular, generalization, analogy, modeling, and others. The analysis of international rules out-lines variations in the recognition and recording of investment income and considerable distinctions from the national features of accounting. The study of tax legislation also shows the impossibility to integrate ac-counting and taxation recognition of investment income. Having examined the rules of accounting and tax legislation, as well as the adaptation of national peculiarities of accounting to international rules, the author formulates recommendations for the improvement of investment income accounting and the representation of its results in financial statements of business entities which do not focus on investing. These recommen-dations are characterized with scientific novelty and relate to the principles of interest income accounting, the unification of criteria for revenue recognition, the features revaluation of financial investments, expand-ing the classification of income in order to generate a report on financial results, the introduction of addition-al accounts into Chart of Accounts to form investment results. The results obtained are recommended to be used for the development and approval of federal accounting standards and internal accounting standards of organizations.