Fixed assets are used by the enterprise in its activities. It concerns absolutely all enterprises, regardless of their forms of ownership, orientation, functional features and other similar problems. The composition of fixed assets is extremely diverse, in addition, there is such a thing as non-productive assets. Features of operation, depreciation, accounting for all these elements, cost analysis and the like factors are also of great importance and are required for accounting in the calculations.
What are fixed assets
Under fixed assets understand any objects that are owned by a single enterprise and participate to some extent in the production process. That is, this includes working machines, and land and spare equipment, and even buildings in which the procedure for manufacturing goods takes place. But one enterprise cannot exist without its own or borrowed fixed assets, because even the smallest company needs at least the premises in which the work will take place.
What is included in fixed assets
All fixed assets are divided into two large categories, which represent the total aggregate of all property that is on the balance sheet of the enterprise. So, allocate production and non-production funds. Types of fixed assets of the production type, in turn, are divided into two categories - active and passive. The active variety is that which is used directly in the production process. For example, machine tools, equipment, machinery, transport and so on. They are directly related to the product creation cycle and therefore actively work. The passive version of fixed assets is represented by land, buildings, structures and other similar objects, without which the creation of products is in principle impossible, but they are not used directly for production. That is, the machines in the workshop are an active tool, but the workshop itself is passive. With all this, there are some other components that can conditionally be part of the fixed assets of the organization, but in fact they are not included. This includes items such as tools, parts, and the like. In general, everything you need for production, but will last much less than 1 year. By the way, it is this indicator that is one of the fundamental in determining the conformity of an object with fixed assets. If the technical operation of the facility is planned for a year or more, then it clearly falls into this category. But if less - then no. The exception is small items, such as office supplies and the like.
Non-productive means
This option funds has recently become increasingly rare. This includes various objects that have absolutely nothing to do with the product creation cycle, however, for some reason, they are listed on the balance sheet of the enterprise. The simplest examples of this are kindergartens, schools, dormitories and other similar structures, which can hardly be correlated with production. Many large enterprises have previously and now have similar assets on their balance sheets. They are needed so that employees feel more confident and feel gratitude to the company. As practice proves, this approach is often even more profitable both in terms of efficiency and in monetary terms than the direct motivation of workers with high wages. And with a combination of these elements, it is possible to achieve truly amazing performance.
Exploitation
The process of operating a fixed asset is very conditional regarding its accounting. The main thing that you need to remember with the correct execution of all documents is that the main tool is put into operation only when it is really completely ready for work at any time. An example is the installation of a machine. Workers of this type are first delivered to the warehouse or to the place of future work, and only then does the process of their preparation for operation take place. So, the machine can go to the warehouse on the 5th. But there it will lie until the 10th day of the month, when it will finally be placed in the right place, connected and completely ready for work. This is precisely the 10th day that will be the date when the fixed asset was put into operation.
Depreciation
Any equipment and similar items will wear out. The operation of fixed assets automatically implies this. The longer it is in service, the less it actually costs. In addition, sooner or later it will require replacement. All this is also displayed in the account. For this, special settlement systems are used, but in short, the main indicators here are the initial cost of the facility and its potential service life. Further, it is all divided into each other and the value that the fixed asset will have in a certain period of time is calculated. But just writing off this value will also be wrong, because it does not go anywhere, but is part of the cost of production. That is, gradually the price of equipment as it were goes into the account of the cost of goods so that closer to the end of the operating life, the profit will allow replacing worn out machines during the work with new ones. The general recommendation would be to somewhat underestimate the period that the technical operation of the device has in relation to its real life. This will allow timely updates and always have a reserve. It should be remembered that not all fixed assets need depreciation. For example, this process is not performed for residential real estate, some types of livestock and plantations, certain types of writers, land and so on.
Accounting for fixed assets
The whole process of working with fixed assets is fully displayed in accounting. Each individual element has its own rules and postings, which should not be neglected. Conventionally, all this can be divided into 5 main groups. The first of these is the receipt of the facility and its commissioning. Types of fixed assets are different, so sometimes a lot of time passes between these concepts. The next stage relates to the depreciation described above, after which the costs of restoring a worn-out product in one way or another are taken into account. And two more stages can be either directly related to the first three, or they can take place separately - disposal and rental of an object. All these are pieces of accounting that differ both from each other and depending on the features that the current composition and structure of fixed assets, factors of the functioning of the enterprise, and so on have.
Analysis
In addition to all other accounting features, with some periodicity, an enterprise can make a special analysis of the composition of fixed assets, which in theory can improve work efficiency and overall return on assets. The most common tasks are the ability to detect some previously unaccounted reserves that would increase the life of the equipment or otherwise increase its economic efficiency. Also, such an analysis gives a fairly accurate picture of how and how all departments of the company are equipped with the necessary facilities, how specifically and with what load they are used, how much is left until decommissioning, and so on. In case of suspicion, the same analysis will allow you to find potential violations or other undocumented changes. The composition and structure of fixed assets does not change, but is simply specified. But according to the results of the analysis, it may be necessary to correct the data so that they are more similar to the real situation.
Valuation and revaluation
All fixed assets have a certain value. It is determined by different methods, depending on how exactly the company received these funds. But in addition to the direct price of a single product, the cost of its transportation, all installation, commissioning, commissioning and so on are also taken into account. The simplest example of this can be considered a conventional machine. It was ordered from a certain organization, but you need to pick it up yourself. After that, you will need to pay separately for installation and launch of the product. Thus, the cost of the object will include its direct price, transportation costs, as well as the amount that will be spent on installation and commissioning. The composition of fixed assets is heterogeneous, because some of them the company can receive in other ways. For example, for free. In this case, an additional assessment should be made based on existing market prices. Revaluation is carried out in the same way. It can take place only once at the beginning of the reporting year on the basis of documents showing changes in the cost of the product.
Inventory
An inventory of fixed assets is another important element of accounting. Any object that is on the balance sheet must have its own number written directly on the product. In many cases, if it is difficult to reach it, dubbing on other structural elements is allowed. Among other things, sometimes there is a special table attached in a certain place, in which all objects with their numbers are located in this room.
Use efficiency
So that fixed assets are used with the greatest possible return, an assessment of their effectiveness in use is constantly carried out. She is responsible for whether this or that object fully performs all its functions, whether there are any downtime or other similar problems. As a rule, this allows timely detection of negative factors affecting the operation of the enterprise and their prompt elimination.
Brief summary
Given all the information provided above, it can be concluded that the composition of fixed assets, their accounting, control and timely implementation of all required accounting reflection in the balance sheet make it possible to influence the overall performance of the enterprise, the quality of production, workload, and so on. In some cases, such information can significantly increase the economic performance of the company, which will positively affect its profitability.