According to the specifications of the research object they are multi-sided and multi-leveled scientific works on the theories of credit and finances.
Widely accepted is the concept of the totality of economic relations that are formed during the formation, distribution, and use of money, or as money sources. Two definitions of finance are available in the “general theory of finances”.
1) “…Finances refer to economic relations, the formation of funds from money sources in the process for distribution and redistribution national receipts according the distribution and use. This definition refers to Capitalism when cash-commodity relationships gain universal character.
2) “Finances are the creation of centralized and decentralized money sources, economic relations relative to the distribution and use, which serve the fulfillment of state functions and obligations, as well as the provision of conditions for the widened further manufacturing. The environment in which it operates is not shown. We agree with part of this explanation and feel it expedient to provide some specifications.
Finances transcend the boundaries of the distribution and redistribution of national income. However, it is an essential foundation of finances. The depreciation fund, which is a part of financial domain, is not used for the distribution or redistribution (of new value) of national income, but rather to the distribution of value that has been developed.
The latest one appears to be part of the main industrial fund’s value, then it is moved to the price of a ready-made product (that is, to the value also) and, after it realization, it is put into the depression fund. Its source is considered before it is set as a depression type in the consistence price for ready products.
The second, and most important goal of finances goes beyond “fulfillment state functions and obligations” and the provision of conditions for a widened further production. Finances exist at the state and on the manufacturing and branch levels. In such conditions, the majority of the manufactures aren’t state.
V. M. Rodionova takes a different view on this topic: “Real formation of financial resources starts at the stage of distribution when the value is realized, and the concrete economic forms of that realized value are separated form the consistence of profit.” V. M. Rodionova emphasizes finances as distributing relationships, while D. S. Moliakov emphasizes the industrial foundation of finance. Both of them provide a solid discussion on finances as a system for formation, distribution, and use of funds of money sources. However, the following definition of finance is available: “Financial cash relationships, which form in the process distribution and redistribution the partial value national wealth total, are related to the subjects of economy and formation and utilization of state cash incomes, and savings in the widened further productivity, in the material stimulation, of workers for satisfaction society social and other needs.”
The following definitions of finance are found in the manuals on the political economy:
“Finances in the socialistic state are economic (cash) relationships. With the help of which, the plan distribution of incomes and savings is made, the funds of money sources and socialistic manufactures can be formed to guarantee the growth of production, the rise of the material and cultural levels of the people, and satisfy other general society needs.”
“The finances of a socialistic society are precisely the system for creating and using the necessary cash resources to guarantee socialistic widened production. The totality of economic relations between the state, manufacturers and organizations, branches and regions, and individual citizens, according to the movement cash funds, are financial relations.
We’ve seen that the definitions of finance used by political economists and financiers are not very different.
There are two things that can be found in every position:
1) Expression of essence and phenomenon in definition of finances
2) The definition of finance is the system for the creation and use of cash resources at the level of phenomena.
3) Distribution of finances, as social product, and the value national income. Definition of the distributions plan character, main goals and economic relations.
We can say that the definition of finance does not need the preposition “socialistic”, even if we do not accept it. These traditional definitions of finance are not accompanied by the modern economic literature. This explanation may be given: “Finances are cash resources of production, and use, and also cash relations appeared in distributing values of economic product and national wealth for the formation and further production cash incomes, savings of the economic subjects and state, rewarding the workers, and satisfying the social needs.” This explains finances as D. S. Moliakov’s and V. M. Rodionov have provided a good explanation. We also see the expansion of the financial foundation. These include the “distribution, redistribution, and partial distribution of the national wealth’s value.” This is a very current process, relative to privatization and transition to privacy. It is regularly used in practice in different countries such as Great Britain and France.
“Finances” – refers to cash sources, financial resources, creation and distribution, redistribution and use, as well as economic relations. These are affected by intercalculations among the economic subjects, movement and circulation of cash, and money usage.
“Finances is the system of economic relations that are related to firm creation, distribution, and use of financial resources.”
We have absolutely innovative definitions of finance in Z. R. Merton and Body’s base manuals. “Finance is the science of how people spend their cash. It’s the science of how they manage income and deficit cash resources over a defined period. Financial decisions are defined by incomes and expenses that are 1) separate in time and 2) impossible to account for beforehand by anyone, neither those who make decisions, nor by any other person.” “Financial theory is made up of a number of concepts… that learns systematically about the subjects of cash distribution relative to time factor. It also considers quantitative models with which estimation, putting into action and realization of alternative versions of all financial decisions takes place.”
These fundamental concepts and quantitative models can be used at all levels of financial decision making. However, the most recent definition of finance focuses on the financial foundation. The main function of the finances lies in satisfying the people’s needs. All economic subjects (firms and state organs at any level) are directed towards this fundamental function.
It is important to understand the meanings of finance, credit, and investment in order to determine how to combine them into one part.
One researcher believes that credit is the consisting portion of finances if it is viewed from the perspective of its essence and category. Another, larger group points out that credit can exist in parallel with financial category. This proves credit’s non-existence in the consistence.
N. K. Kuchukova stressed the independence of the credit category and noted that it was only its “characteristic characteristic the turned movement of value, which does not relate to transmission of loan opportunities along with the owners’ right”.
N. D. Barkovski replied that the functioning of money provided an economic basis for apportioning finance and credit separately and gave rise credit and financial relationships. He recognized the Gnoseological roots in science in money, credit and the research of these economic relations.
Let’s look at the most common definitions of credit. Credit was deemed “luckier” than finances in modern publications. We find the following definition of credit within the finance-economical dictionary. Credit is a loan made in cash or commodity and subject to a return of %. Credit is a type of loan capital movement and expresses economic relations between creditor and borrower.
This is the traditional definition for credit. The earlier dictionary of economics stated that credit is a system of economic relations formed by the transfer of cash into temporal use, and this is under the conditions for returning and paying percent.
The following definition of credit is found in the manual of political economy under reduction by V. A. Medvedev: Credit, as an economic category, expresses relations between society, labour collective, and workers during formation, usage, and return of loan funds, under terms of paying present, and during transmission of sources to the temporal usage, accumulation.