Fixed assets are called material assets that are used in the production of products to perform various works and services, while managing companies for a period exceeding 12 months, regardless of their value. And those items that at the time of acquisition cost in excess of one hundred times the minimum level of monthly wages, and which do not depend on their useful lives.
Fixed assets in accounting are structures, buildings, machinery and equipment used for core activities, measuring instruments, computer equipment, long-term planting, livestock, roads, vehicles and other fixed assets. And also, subsoil, forests, rivers, land, both own and rented. All capital investments and improvement work are also recorded annually in fixed assets.
Machinery and equipment and those items that are in transit are stored in warehouses as finished products, purchased for sale as goods, put into installation are not considered fixed assets and depreciation is not charged on them.
All fixed assets in accounting are conventionally divided according to their purpose into two large groups: production, which are directly involved in the work of the enterprise (machinery, equipment, workshops, transport) and non-production fixed assets (buildings, saunas, dormitories, canteens, etc.) which do not participate in the production process itself, but affect the manufacturing process of products or work performed by the enterprise.
According to the degree of use, fixed assets in accounting are divided into their own, leased, in stock, for conservation, for reconstruction or at the completion stage. Fixed assets that are purchased from a supplier, received free of charge as a gift, contributed by the founder to the authorized capital and other income are registered.
Upon receipt of fixed assets in accounting are at initial cost. This may be the cost indicated by the supplier under the contract or invoice, but taking into account all the costs of delivery, installation and installation of equipment. If the fixed asset is contributed by the founder into the authorized capital, the initial cost is negotiable and is reflected in the acceptance certificate. In case of donation, the initial price is the market price of the item.
The accounting records the replacement, liquidation and residual value of the fixed asset. The replacement value is understood as the value that will need to be paid at the market price when replacing a fixed asset with a new one, similar if it is unsuitable for use.
The residual value is the difference between the initial cost and the amount of depreciation. Depreciation in accounting is a uniform distribution of the value of a fixed asset over the entire useful life. Thus, there is a write-off of physical and moral depreciation. In production, the depreciation amount is transferred to the cost of production. When submitting a tax return, the amount of depreciation is fully deductible.
When calculating depreciation for accounting take the difference between the initial and residual value of the funds. The residual value is understood as the value that the company expects to receive after its full depreciation during the sale or liquidation of the fixed asset. It is more convenient to consider the liquidation value as equal to zero in order to avoid misunderstandings during tax audits. This must be reflected in the accounting policies of the enterprise.
Monthly accounting of depreciation of fixed assets for all fixed assets that are used to operate the enterprise. Depreciation commences on the 1st day of the month following the month of commissioning of the fixed asset. Finish depreciation from the 1st day of the next month after its disposal or full deduction of its value from the balance sheet. Depreciation is charged for the entire period of useful life, during which the company receives income. Do not charge depreciation on land, mineral resources, monuments and works of art, library funds.
In tax accounting, there are fixed interest rates of depreciation for each group of fixed assets. But each enterprise has the right to independently determine the useful life of fixed assets and to revise the terms taking into account their reconstruction and modernization, but with an indication of this in the accounting policy.
The disposal of fixed assets occurs upon write-off in case of unsuitability under the act on write-off (OS-4) and the defective statement. Fixed assets can be sold, donated by issuing under the contract and relevant invoices - invoices and invoices. It can be made as a contribution to the authorized capital in another organization according to the act of acceptance and transfer (OS-1). Or draw up a leasing agreement.