The main balance assets include assets used in the production of any product, in the provision of domestic or industrial services, and the performance of specialized work. They also include assets used for short-term lease for a fee.
Fixed assets are divided into two large groups. In the first group there are assets from account 01, and the second group of assets are assets from account 03. Each of these groups has its own function. Fixed assets used in production are accounted for in account 01. Assets used for short-term or long-term leases are accounted for in account 03. All property of an economic entity is distributed in accordance with their useful terms of use and is divided into the following depreciation groups of fixed assets.
The period of production use for any object of fixed assets (fixed or intangible assets) is calculated based on the period during which these objects will be used in the economic and production activities of the enterprise or organization. This period is calculated and approved by the enterprise on its own in accordance with the approved accounting provisions, which include strictly regulated depreciation groups of fixed assets approved by the government of the Russian Federation.
The classification of fixed assets by depreciation groups consists of ten main sections, each of which includes assets included in the general list of the Russian classifier of fixed assets. These are industrial buildings and structures; machinery workers and power equipment, computing facilities and transport, industrial tools and livestock breeding, plantings and capital investments, natural resources and land.
The first group includes the organization’s property (machinery and equipment) with a practical production period of one to two years.
In the second group is the property of the enterprise - machinery and equipment used in the production activities of the organization for normative periods of two to three years. This also includes sports (household and industrial) equipment and perennial plantings (wild strawberries).
The third group includes machinery and industrial equipment, inventory, structures and gears (devices), vehicles used for a period of three to five years.
In the fourth group, the terms of use of the property are five to seven years. These include: buildings, transmission devices and structures, equipment and production machines. As well as vehicles (cars, cars, trucks, tractors, buses and trailers), perennial plantations (aronia, orange and lemon), equipment (multifunctional packaging).
In the fifth group, the period of use is seven to ten years, in the sixth group - from 10 to 15 years.
The seventh group includes funds with a term of use of 15 to 20 years. In the eighth group, the useful life is from 20 to 25 years, in the ninth group - from 25 to 30 years.
The tenth group includes objects of fixed assets that are subject to exploitation with a term of over three decades. Note that the classification of fixed assets included in depreciation groups contains the same ten groups of fixed assets (assets) and is strictly regulated by the government of the Russian Federation.
For the purposes of proper taxation, fixed assets in accounting have three valuations: initial, restoration or residual.
The initial cost of fixed assets includes all expenses associated with their acquisition, manufacture, delivery and bringing to working condition.
The replacement cost includes historical cost and revaluation.
The residual value is formed from the replacement cost less accumulated depreciation.
Depreciation groups of fixed assets differ in terms of depreciation, which depend on the object used. Correction (increase or decrease) factors can be applied to the depreciation (amortization ) rates.
To calculate depreciation amounts under the tax code of the Russian Federation, business enterprises have the right to use the linear or non-linear method.
With the linear method of determining for all groups of fixed assets, the standard depreciation rate is calculated as its initial (replacement) value and its useful life.
In the non-linear method of determining depreciation groups of fixed assets have the following wear factors. Group No. 1 - coefficient 14.3, No. 2 - 8.8. And then No. 3 - 5.6, No. 4 - 3.8, No. 5 - 2.7, No. 6 - 1.8, No. 7 - 1.3, No. 8 - 1, No. 9 - 0.8 and No. 10 - 0.7.