In the production process, together with the objects of labor , the means of labor or, in other words, fixed assets are simultaneously used . These include equipment, machinery, inventory (both economic and industrial), as well as other implements of production, thanks to which the organization operates. In addition, constructions and buildings, transmission devices, which do not directly affect the subject of labor, are also referred to non-durable assets, but they create the necessary conditions for the implementation of the production process.
In order to summarize the groups of all long-term assets, the classification of fixed assets. All the means of labor of the enterprise for a long period take part in production, while maintaining their original cost. But at the same time, they gradually age and wear out, and therefore reflect their value on the newly created product.
The concept, classification and valuation of fixed assets are very important in accounting. You should be aware that in order for property to be classified as long-term assets, the following two conditions must be met:
- Their useful use should be for a period of more than one year;
- The established limit of value per unit of means of labor must be observed.
The classification of fixed assets is based on several signs:
- in accordance with the type of activity (for example, in engineering there will be some long-term assets, in construction completely different, and in trade third, etc.);
- by the nature of entrepreneurial activity (there are production and non-production);
- by participation in the production and circulation process they are divided into active and passive;
- by belonging to a business entity, fixed assets may be owned by the enterprise or leased;
- upon use (being in use, under reconstruction, in stock, for conservation).
It should be noted that the concept and classification of fixed assets is not all that is desirable to know. Like everything else, the long-term assets of the organization require the correct detailed accounting. It is conducted with the aim of:
- control over the paperwork and the movement of funds in the context of individual groups and objects;
- control over their safety and effective use;
- the correct and timely determination of depreciation for inclusion in production costs;
- reliable reflection in the accounting of liquidation and write-off of fixed assets ;
- accurate and timely reflection of the amounts spent on their repair;
- control over the integrity and safety of long-term assets that are under conservation.
The classification of fixed assets provides that they may come to the organization from suppliers or as a result of construction. Moreover, in accounting, upon receipt of funds from suppliers, a waybill (freight forwarding) must be drawn up , as well as an act on the transfer and acceptance of an object (possibly groups of objects) of fixed assets. If non-expendable assets are received by the organization as a result of construction, then acts on their acceptance and transfer are drawn up after its full completion.
In addition to all of the above, long-term assets of the organization can be classified by type: tool, vehicles, equipment, perennial plantations, productive and livestock, and others. It should be noted that it is the classification of fixed assets by their types that underlies the creation of reports on the actual presence of assets of the organization of movement.