Fixed capital investment (PKI) is a long-term capital investment for the purpose of earning a profit. Moreover, the investment process is any operation to manage the organization’s resources in order to increase its real capital, which have time limitations, but sufficient to make this factor decisive in obtaining results.
So, investments can be represented in the form of cash, shares or other securities, property rights, rights to use natural resources, as well as technology, loans and licenses, intangible assets.
Thus, we can say that the investment process is the result of financing by one entity (or state) of another, or the transfer of rights of one entity to another. It should be said that in order for investments in fixed assets to have high growth, it is necessary to have an appropriate source of financing, since this process is not possible without this. In other words, the investment indicator will become reliable if its growth will correspond to the growth of all sources of financing.
This process can be effective if it is based on the full consideration of existing sources of investment, on the structuring of investment objects by industry and sectors of the economy.
Investments in fixed assets directly depend on the volume of financing, so the latter can control their performance. This method does not apply to the economy as a whole, but is used by statistics on organizations of various sizes. For example, the amount of PKI of organizations is equal to the sum of two sources of financing - both own and involved funds.
Own funds are formed by making profit and depreciation of funds. Whereas attracted - include bank loans, borrowed and budgetary funds, foreign investments and so on.
In any case, there are two factors that characterize this process: risk and time.
Thus, we can say that investment in fixed assets is the sum of all costs that are directed to the creation of fixed assets: the purchase of machinery, equipment, the construction of new facilities, the reconstruction of old facilities, leading to an increase in its value, and so on with a view to increasing profits. Also today, the costs of education, science and staff development can be considered investments in fixed assets.
It should be noted that the state takes an active part in the investment process in two ways: by investing in the public sector and giving loans and subsidies. Most of these investments go to infrastructure development, the rest (investment in fixed assets) - to costs and expansion and reconstruction of enterprises, as well as their new construction and so on.
Characterizing PKI, they use the concept of “norm and volume of accumulations”. Volume is expressed in invested capital, while the norm expresses the ratio of volume to domestic product.
Thus, investments in fixed assets are an integral part of not only any organization, but also the state. All of them are aimed at expanding enterprises, increasing their potential, which leads to an increase in investment growth. In this case, in the form of investments, it can be monetary funds, including various kinds of securities, as well as rights to use natural resources, real estate rights, as well as various intangible assets presented in the form of scientific research, development of new technologies, which future may make a profit.