What is related to fixed assets?
Before you talk about what relates to fixed assets, you should give the very definition of the concept. So, fixed assets represent a certain part of the property of the organization, which is used for a long period of time (more than 12 months) in production, as well as management purposes.
What are the main means
What is related to fixed assets? These are any assets accepted for accounting in the form of fixed assets only in the case when the following conditions are fulfilled at the same time:
- Objects are intended for use in production purposes, or during the provision of services, performance of work, serve to meet the management needs of organizations.
- Objects are intended for use over a long period of time, namely, more than 12 calendar months.
- The organization does not assume the subsequent resale of a particular object, that is, it is a question of exclusively “personal” use.
- Objects will be able to bring the organization economic benefits in the near or in the distant future, that is, income.
If, however, it is more concrete and material to discuss what relates to fixed assets, then, according to the current legal norms, they are, for example, equipment and machinery, structures, buildings, computers. Successfully attributed here can also be economic and industrial inventory, tools, vehicles, office equipment, housing, control devices and devices, perennial plantings, breeding, productive and working cattle.
It should be said separately about non-profit organizations that take objects to the financial statements. Here, the main means are objects that are not used in activities that are aimed at achieving the goals defined in the statute. Of course, the property must also be operated for a time period of at least 12 months, during which the organization does not plan to resell it.
In general, the concept of “fixed assets” does not exist as such in the Tax Code.However, it defines what should be attributed to depreciable property. And these are all the same objects, the useful life of which is more than 12 months, and the initial cost is more than 10 thousand rubles.
Fixed assets, the purpose of which is limited to the provision for a fee for temporary use or possession for the purpose of earning income, in the financial statements are displayed in the composition of profitable investments in value.
Assessment of fixed assets
Assess fixed assets according to the primary, residual and replacement value:
- Initial value - according to its initial value, everything related to fixed assets is taken to the financial statements. This cost represents the total amount of actual expenses on the part of the organization for the purchase, manufacture, or construction of a specific asset, excluding VAT, as well as other recoverable taxes. The initial value of funds that are deposited in the accounts of contributions to the authorized capital of organizations is their direct monetary value, which is agreed by the founders.If the funds are received completely free of charge, that is, by donation, the initial cost, as a rule, their value is recognized in the market at the present time. Accounting provides for changes in the initial value during the construction, retrofitting, renovations, upgrades, partial liquidations, as well as revaluations.
- Residual value - the residual value means the difference between the value of the initial and also depreciation accrued as a result of use. In the balance sheets, fixed assets are recorded according to their residual value.
- Replacement cost - it estimates fixed assets in the present conditions, taking into account modern prices and equipment.
Getting into the property
After becoming acquainted with what relates to fixed assets, as well as analyzing their assessment, it is necessary to understand how the funds discussed can be received by the organization. There are several ways:
- On account of contributions to authorized capitals from the founders.
- As a result of construction work of various kinds.
- By purchasing for an appropriate fee.
- As a result of the deed of gift, that is, donation.
Depreciation of fixed assets
Under the depreciation means a simple process of a smooth transfer of the cost of funds for the products that are produced, that is, for services, or for work. What is it done for? There are several answers to this question. Some experts in the field of economics believe that the depreciation mechanism creates cash flows in the future directed to fixed assets. Others look at depreciation as a way of dividing over periods of large-scale expenditures in accordance with the principles of accruals. The depreciation amount is fixed on a monthly basis, which is determined for each object separately.
Thus, we discussed the question of what relates to fixed assets. This is one of the key concepts in the entire economic theory, without which it is impossible to do anything when drawing up a business plan, successful business, and, in general, any self-respecting person should probably be aware of this in our progressive times.