Content
- Introduction
- 1. The concept, classification and valuation of fixed assets
- 2. Indicators of the use of fixed assets
- 3. Depreciation of fixed assets
- Conclusion
- References
Introduction
Production activities of enterprises are provided not only at the expense of fixed assets, but also through the use of material, labor and financial resources. The means of labor and the material conditions of the labor process serve as fixed assets. Machines, working machines, transfer devices, tools are means of labor. Material conditions of the labor process are industrial buildings, vehicles and others.
Fixed assets for a long period of use come to the enterprise and are put into operation; wear out as a result of operation; move within the enterprise; are subject to repair, with the help of which their physical qualities are restored; Drop out from the enterprise due to deterioration or inexpediency of further use.
Enterprises have the right to own, use and dispose of fixed assets.
The main tasks of accounting for fixed assets are: control over the safety and availability of fixed assets at places of their use; correct documentation and timely reflection in the accounting of their receipt, retirement and transfer. As well as monitoring the rational use of funds for the reconstruction and modernization of fixed assets, the calculation of the proportion of the value of fixed assets in connection with use and depreciation for inclusion in the costs of the enterprise. Fixed assets have a direct impact on the efficiency of production, the quality of work and the results of the entire financial and economic activity of the enterprise.
In this regard, an urgent issue is the analysis of the use of fixed assets, the assessment of the dynamics of indicators of fixed assets, the validity of factual data on the formation of fixed assets.
The spectrum of studying the issues of organizing the management of fixed assets, as well as increasing the efficiency of their use, is wide enough and represents both theoretical and practical interest. This is the purpose of the work, that is, the study of theoretical, methodological foundations for the organization of the management system of fixed assets and the practical work of the enterprise in this aspect.
1. The concept, classification and valuation of fixed assets
Fixed assets are part of the organization's assets (assets). When accounting assets are accepted as fixed assets, the following conditions must be met once:
a) use in the production of products in the performance of work or provision of services or for management needs of the organization;
b) use for a long time (more than 12 months);
c) the organization does not intend to re-sell these assets;
d) the ability to bring economic benefits (income) to the organization in the future.
According to another definition, fixed assets (buildings, structures, machinery, machinery, implements, vehicles, etc.) are means that participate in economic activities for a long time and wear out gradually. They transfer their value to the cost of the products manufactured with their help in parts. In accounting, this is reflected by the accrual of depreciation. The time during which the fixed assets bring the income of the organization or serve the purpose of its creation is called the period of their useful use.
The scheme of fixed assets of the enterprise is shown in Figure 1.
Figure 1 & ndash; Fixed assets of the enterprise(Animation: size - 112 KB, frames - 7, repetitions - 5)
Tasks of accounting for fixed assets - control over the safety of all the fixed assets of the organization; correct documenting of the receipt, transfer and their disposal, timely and accurate reflection in the accounting registers of the movement of fixed assets and their use; correct accrual of depreciation in accordance with established norms and timely reflection of these amounts in the accounts; identification of results from disposal and liquidation of fixed assets.
By designation, the fixed assets of the organization are divided into production fixed assets of the main activity, production fixed assets of other industries, non-productive fixed assets.
Capital assets also include capital investments for radical land improvement (drainage, irrigation and other land reclamation works) and leased fixed assets. In the structure of fixed assets, land plots owned by the organization, objects of nature use (water, mineral resources and other natural resources) are taken into account. Classification of fixed assets by type is the basis of their analytical accounting.
In terms of the degree of use, fixed assets are divided into those in use, the reserve (reserve), the stage of completion, additional equipping, reconstruction and partial liquidation, conservation.
The unit of accounting for fixed assets is an inventory object. An object of fixed assets is an object with all adaptations and accessories or a separate constructively detached object intended for performing certain independent functions.
Valuation of fixed assets is carried out in the following areas.[2].
The initial value of fixed assets. Allows you to determine the amount of costs for their purchase or erection and is the basis for their registration and determination of depreciation charges for renovation (full recovery). It includes all the costs of erecting (constructing) or acquiring fixed assets, including the costs of delivery and installation, as well as other costs necessary to bring this object to the state of readiness for operation as intended (except for the VCP).
The fixed assets of the enterprise can be created and purchased at different times, so their initial assessment may not be comparable to the actual conditions. As a result, fixed assets at the enterprise are estimated at a replacement cost, which is understood as the cost of their reproduction in modern conditions. The deviation of the replacement value of fixed assets from the initial value depends mainly on the rates of inflation and STP. The recoverable amount is determined by the revaluation of fixed assets.
Revaluation of fixed assets (determination of their real value) allows objectively to estimate the true value of fixed assets; more accurately and accurately determine the costs of production and sales of products, as well as the amount of depreciation deductions sufficient for simple reproduction of fixed assets; objectively establish sales prices for fixed assets sold and rent (in the event of their leasing).
The residual value is the difference between the original, or replacement, value and the amount of depreciation, that is, that part of the value of fixed assets that has not yet been transferred to the products. Determination of residual value is necessary primarily to assess the quality of the situation and plans for the reproduction of fixed assets, as well as to compile a balance sheet.
The enterprise can also determine the liquidation value of fixed assets, which is established by subtracting the proceeds from the sale of depreciated or decommissioned fixed assets and the cost of dismantling them.
The amount of the revaluation of the item of fixed assets, equal to the amount of its mark-up spent in previous reporting periods and charged to retained earnings (uncovered loss), is charged to the profit and loss account of the reporting period as income.
The results of the revaluation of fixed assets conducted by the organization on a voluntary basis are taken into account for tax purposes. The amount of additional capital written off on the retirement of fixed assets will not be taken into account for tax purposes.
2. Indicators of the use of fixed assets
One of the features of the fixed assets of the enterprise is their repeated use in the production process. However, over time, fixed assets lose their original characteristics due to exploitation and natural wear.
There are physical and moral depreciation of fixed assets.
By physical wear and tear is understood the loss by means of labor of their initial production and technical qualities in the process of their use. There are full physical depreciation, which leads to the liquidation or replacement of fixed assets by new ones (capital construction), and partial, which is repaired by repair. In addition, physical depreciation can occur as a result of the operation of the fixed asset (physical deterioration of the first kind) and as a result of natural adverse effects, such as, for example, oxidation (physical deterioration of the second kind).
The level of physical depreciation of fixed assets depends on the initial quality of the assets, the degree of their exploitation, the level of aggressiveness of the environment in which the fixed assets function, the level of qualification of the maintenance personnel, the timeliness of repairs,
Along with physical wear and tear, fixed assets undergo moral wear (depreciation). It manifests itself in the fact that there is a decrease in the efficiency of the use of fixed assets in production, because labor instruments are depreciated, lose value before their physical wear and tear, until the end of their physical life. Moral wear is a direct consequence of NTP and is expressed in two forms.
From the degree of depreciation of the enterprise's basic production assets, the volume and quality of products, its competitiveness, the level of production costs and the efficiency of the enterprise's operation directly depend. Therefore, one of the most important tasks of management is to monitor the state of fixed assets in order to prevent their excessive physical and moral wear.
In a market economy, the process of reproduction of fixed assets can be carried out through various sources. The basic means for reproduction come from contributions to the authorized capital; at the expense of profits remaining at the disposal of the enterprise; as a result of gratuitous transfer; by lease.
Exceeding the value of the renewal coefficient over the value of the retirement ratio indicates that the enterprise is in the process of updating its fixed assets.
One of the important tasks of the production and economic activity of the enterprise is to maintain the used equipment in good technical condition. This task is solved, on the one hand, by strict observance of the rules for the operation of equipment, on the other - by organizing maintenance services for equipment that includes maintenance and repair.
3. Depreciation of fixed assets
Amortization is the process of gradual transfer of the value of fixed assets to the products (work, services).
Why this is necessary: there are several points of view on the economic meaning of depreciation. Some experts believe that with the help of the depreciation mechanism, cash flows are created that will later be directed to the reproduction of fixed assets, while others consider amortization as a way of "smearing" large-scale expenditures over periods, according to the accrual principle.
The annual amount of depreciation is determined by:
in the linear method - proceeding from the initial cost or (current (replacement) cost (in case of revaluation) of the item of fixed assets and the depreciation rate calculated on the basis of the useful life of this object;
at the method of the reduced balance - proceeding from the residual value of the item of fixed assets at the beginning of the reporting year and the depreciation rate calculated on the basis of the useful life of this object and the coefficient not exceeding 3 established by the organization;
at the method of write-off of cost on the sum of numbers of years of useful life - proceeding from initial cost or (current (replacement) cost (in case of revaluation) of object of the basic means and the ratio, in numerator - number of years remaining before the end of useful life of the object, and in the denominator - the sum of the years of the useful life of the object.
During the reporting year, depreciation for fixed assets is accrued on a monthly basis, irrespective of the applied method of calculation in the amount of 1/12 of the annual amount.
For fixed assets used in organizations with a seasonal nature of production, the annual amount of depreciation for fixed assets is charged evenly during the period of the organization's operation in the reporting year.
In the method of write-off of costs in proportion to the volume of products (works), accrual of depreciation deductions is made based on the natural indicator of the volume of products (works) in the reporting period and the ratio of the initial value of the item of fixed assets and the estimated volume of products (works) for the entire useful life of the item of fixed assets.
Amortization is not accrued on:
- objects of fixed assets, consumer properties of which do not change over time (land plots, objects of nature use, objects classified as museum items and museum collections, etc.).
- objects of housing stock (if they are not used to generate income);
- objects of external improvement and other similar objects of road facilities;
- productive livestock;
- perennial plantations that have not reached the operational age;
- fixed assets used for the implementation of legislation on mobilization training and mobilization, 16 which are conserved and are not used in the production of goods, in the performance of work or provision of services, for management needs of the organization or for payment for temporary possession and use or for temporary use .
Depreciation commences on the 1st day of the month following the month in which this facility was put into operation, is terminated - from the 1st day of the month following the month when the full write-off of the value of the object occurred or when the object was dropped from the depreciated property.
Depreciation is charged for the entire useful life of the asset. The useful life is the period during which the use of the item of fixed assets brings the economic benefits of the organization.
The useful life of the organization is determined independently when the fixed asset is taken into account.
In the cases of reconstruction, modernization or technical re-equipment, the useful life is reviewed.
For accounting purposes, the term is determined based on the expected useful life of the facility and the expected physical wear and tear, regulatory and other restrictions on the use of the facility.
Depreciation of fixed assets is an objective process of gradual transfer of the value of fixed assets as they become depreciated at the cost of the products produced with their help[3].
Depreciation deductions are made only until the total value of fixed assets is transferred to the cost of production.
When calculating depreciation deductions, the depreciation rate is used.
The rate of depreciation is the amount of depreciation for a certain period of time, fixed in percentage of the cost, for a specific type of fixed assets.
Useful life is the period during which an item of fixed assets serves to fulfill the objectives of the organization's activities.
From the theoretical point of view, the useful life should coincide with the normative service life of the facility, but in practice, the useful life is often set.
Depreciation of fixed assets is an objective process of gradual transfer of the value of fixed assets as they become depreciated at the cost of the products produced with their help.
Depreciation deductions are made only until the total value of fixed assets is transferred to the cost of production.
When calculating depreciation deductions, the depreciation rate is used.
The rate of depreciation is the amount of depreciation for a certain period of time, fixed in percentage of the cost, for a specific type of fixed assets.
Useful life is the period during which an item of fixed assets serves to fulfill the objectives of the organization's activities.
From the theoretical point of view, the useful life should coincide with the normative service life of the facility, but in practice, useful life is often set shorter than the normative.
After the full transfer of the value of fixed assets to the cost of finished products, the depreciation is stopped. In the world there are four main approaches to calculating depreciation charges: 1) uniform; 2) accelerated; 3) slowed down; 4) production.
With a uniform approach, the amount of depreciation for the months of operation of the facility is the same.
With the accelerated approach in the first years of operation of the object, the amount of depreciation is greater than in the subsequent ones, and in the slow-motion approach - on the contrary.
Accelerated depreciation of fixed assets can reduce the corporate profit tax in the first years of operation of the facility, quickly update fixed assets, reduce losses from moral and physical depreciation of the active part of fixed assets.
With the production method, the amount of depreciation deductions depends on the volume of output produced at the depreciated facility. [8].
In the country for the purposes of tax accounting, only two methods for calculating depreciation are used: linear (corresponds to the uniform method) and non-linear (corresponds to the accelerated method). In this case, the nonlinear method can not be used for objects included in the eighth, ninth and tenth depreciation groups. For the purpose of accounting, the country uses four methods of calculating depreciation for fixed assets: linear (similar to linear for tax accounting purposes); method of reducing the balance; the way of writing off the value is proportional to the sum of the years of the useful life (the method of the sum of the numbers); the way of writing off the value in proportion to the volume of output (production method).
With a linear method, the amount of depreciation deductions for all months of operation of the facility is the same.
If revaluation of fixed assets has been carried out, depreciation charges are calculated on the basis of replacement cost. The depreciation for the group of fixed assets can be calculated on the basis of the average annual cost.
Enterprises independently calculate depreciation rates based on the useful life of fixed assets.
In fact, the depreciation rate reflects the annual depreciation of fixed assets, expressed as a percentage.
With the method of decreasing the balance and the method of the sum of numbers, the annual amounts of depreciation charges gradually decrease during the useful life of the fixed assets.
In the write-off method, in proportion to the sum of the numbers of years of useful use, the annual amount of depreciation is calculated based on the initial value of the fixed asset and the annual ratio, where in the numerator the number of years remaining until the end of the service life of the object, and in the denominator - the sum of the years of service life of the object.
Conclusion
The fixed assets at the enterprise in the process of their operation are constantly worn out, and to maintain them in a working condition, periodic repairs must be carried out.
Restoration repair is a special kind of repair caused by various circumstances: natural disasters (flood, fire, earthquake), military destruction, long inactivity of fixed assets. Restorative repairs are carried out at the expense of special funds of the state.
Current repairs are minor repairs, they are made in the process of functioning of fixed assets, as a rule, without a long break in the production process. For minor repairs, certain parts and components are replaced, certain fixing works and other measures are carried out.
Modernization is a technical improvement of fixed assets in order to eliminate moral attrition and improve technical and economic indicators to the level of the latest equipment. By the degree of renovation, partial and complex modernization is distinguished (radical alteration). The methods and tasks of the operation distinguish between the standard and target upgrades. Typical modernization - a massive one-type changes in the serial design; target - improvements related to the needs of a particular production.
In order to evenly include the upcoming costs of repairing fixed assets in production costs (sales costs) for the reporting period, the organization may create a provision for repairs to fixed assets (including leased assets). To make a decision on the formation of a reserve for expenses for the repair of fixed assets, documents confirming the correctness of the determination of monthly allocations are used, such as defective statements (justifying the need for repair work); data on the initial cost or current (replacement) cost (in case of revaluation) of fixed assets, estimates for repairs; specifications and data on the timing of repairs, the final calculation of allocations to the reserve of expenses for the repair of fixed assets.
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