What are non-financial assets? This article is about this. We offer a more detailed look at the structure and subspecies of this object.
The concept and structure of non-financial assets
Non-financial assets are objects that are used by business entities, while they bring them potential or real economic profit as a result of their operation. What subspecies are they divided into?
Depending on the method of creation, non-financial assets are divided into non-production and production. Let us consider in more detail what they are.
Production non-financial assets
Production assets are fixed assets (PF), which are used repeatedly or continuously for a long time (at least a year) for the production of goods and services. But there are exceptions. The fixed assets do not include goods that are single-use: coal, plants, animals, and so on.
Fixed assets (tangible) include (or non-financial assets include): buildings (non-residential), structures, equipment and machinery. It also includes: vehicles, various kinds of equipment (household and industrial), perennial plantations, livestock (except young animals and intended for slaughter), material fixed assets that are not in other groups (libraries, animals in zoos).
There is also the concept of intangible fixed assets. What it is? They are intangible production assets. They are presented by information that is on a closed material carrier. What does it mean? The cost of intangible production media is determined by the price of this information, not the media itself. Intangible funds (basic) include: computer software, exploration, entertainment, literature and art. This also includes high technology (industrial) and others.
Intangible assets (in accounting) are recorded without division into production and non-production groups. This negatively affects the statistics. When assessing the role of PF in production, it is important to divide them into active and passive.
In accounting, a similar concept of āfixed assetsā is used, which refers to non-financial assets. This concept can be considered from the other side. Assets can be attributed to fixed assets if the following conditions are met:
1. The organization does not intend to resell these assets.
2. The institution expects profit in the future.
3. The organizationās exploitation of assets over 12 months or more.
4. Use in production, in the performance of work, services or in managerial needs.
The āfixed assetsā should include the same objects as in the āfixed assetsā, plus capital investments to improve the condition of land, rental objects, land, and units of natural use.
In accounting, there is no concept of āintangible fixed assetsā. What does it look like? The residual value of fixed assets is included in the balance sheet.
Next stage. Fixed assets are reflected in accounting at primary cost.
Industrial non-financial assets include inventories of tangible fixed assets and values. They consist of products created at the current stage and in the early periods. At the same time, they are stored for sale, use in production or for other purposes. What is it? These are raw materials, finished products, materials, production at the stage of completion, goods for resale.
Non-financial assets are also values. They are expensive goods that are not intended for production and consumption. These values āāretain their value over time. These include: stones and precious metals (not used at the enterprise as a resource base for production); works of art and antiques; values āāthat are not attributed to other categories (high-value jewelry, collections).
Non-productive intangible assets
What it is? Non-productive intangible non-financial assets are legal forms that are formed in the production process and are capable of moving from one unit (institutional) to another. These include documents allowing the owner to engage in specific activities. At the same time, they exclude from this functioning other units (institutional), except by permission of the owner.
These assets include:
1. Leases and various agreements with the right to transfer (acquired good-villas - the conditional estimated value of the reputation).
2. Objects of patenting - the latest inventions, which are characterized by technical novelty, which are granted judicial protection on the basis of the law.
Tangible non-productive assets
Consider this concept. Tangible non-productive non-financial assets are economic (natural origin) funds. They can be: renewable or not in a natural way (land; water bodies on its surface with the right of ownership extending to them). What else is included in this group? These are underground resources (water), minerals (mineral wealth), natural biological reserves (uncultivated) - the animal and plant world.
Non-financial assets in budget accounting (BU)
In the budget accounting, state (municipal) property is reflected as non-financial assets. The main document that regulates the management of these facilities is the Instructions for the control (order of the Ministry of Finance of August 26, 2004 No. 70n).
BU non-financial assets can be divided into groups: fixed assets (machinery and equipment, structures, residential and non-residential premises, vehicles, industrial, household and soft inventory). Also included: library fund, jewelry, jewelry and other fixed assets. The list continues with non-produced assets (subsoil resources, land, electromagnetic spectrum and others). Intangible assets, inventories (dressings and medicines, food, construction, fuel and lubricants, etc.), depreciation - all this is included in this group.
More details about non-financial assets in budget accounting can be found in the order of the Ministry of Finance of August 26, 2004 No. 70n.
Accounting for investments in non-financial assets
What it is? To account for investments in non-financial assets, account 010600000 (investments) is used. This method is not the only one.
Grouping accounts are also used: 010610000 - ācontribution to the immovable property of the institutionā, 010630000 - āinvestment in other property of the organizationā, 010640000 - ācontribution to the objects of leasingā. There are many other accounts. For example, 0106 11000 - āinvestments in fixed assets, real estate of the organizationā, 010613000 - āinvestments in non-production assets, real estate of the organizationā and others.
All accounts can be found in the specialized literature.