Structure and composition of fixed assets. Operation, depreciation and accounting of fixed assets

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Fixed assets are used by the enterprise in its activities. This applies to absolutely all enterprises, regardless of their form 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 similar factors are also of great importance and must be taken into account in the calculations.

What are fixed assets

Fixed assets are understood as 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 plots 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 a room in which work will take place.

What is includedfixed assets

All fixed assets are divided into two large categories, which represent the total set of all property that is on the balance sheet of the enterprise. So, allocate production and non-production means. Types of fixed assets of a production type, in turn, are divided into two more categories - active and passive. The active variety is what is used directly in the production process. For example, machines, 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 plots, 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 included in 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 compliance of an object with fixed assets. If the technical operation of the facility is planned for a year or more, then it clearly belongs to this category. But if it's less, then no. The exception is small items such as stationery and the like.

Non-production assets

This type of funds has become increasingly rare lately. This includes various objects that have absolutely nothing to do with the product creation cycle, but are listed on the balance sheet of the enterprise for one reason or another. The simplest example of this is kindergartens, schools, hostels and other similar structures, which are virtually impossible to correlate with production. Many large enterprises have such assets on their balance sheets before and now. They are needed to make employees feel more confident and grateful for the company. As practice shows, such an approach is often even more beneficial both in terms of efficiency and in terms of money than the direct motivation of workers with high wages. And with a combination of these elements, it is possible to achieve truly amazing performance.

Operation

The process of operating a fixed asset is very conditionally related to its accounting. The main thing to remember with the correct execution of all documents is that the fixed asset is put into operation only when it is really fully ready for work at any given time. An example would be machine installation. Working machines of this type are first delivered to a warehouse or to a place of future work, and only then does the process of preparing them for operation take place. So, the machine can go to the warehouse on the 5th. But it will lie there until the 10th day of the month, when it will finally be placed onin the right place, connected and ready to go. Exactly the 10th number will be the date when the fixed asset was put into operation.

Depreciation

Any equipment and the like 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 calculation systems are used, but in short, the main indicators here are the initial cost of the object 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 it would also be wrong to write off this cost just like that, because it does not disappear anywhere, but is included in the cost of production. That is, gradually the price of the equipment, as it were, goes into the account of the cost of goods in such a way that closer to the end of the service life, the profit will allow replacing the machines worn out in the process of work with new ones. The general recommendation would be to somewhat underestimate the period that the technical operation of the device has, relative to its actual service life. This will allow you to update in a timely manner and always have a reserve. It should be remembered that not all fixed assets need depreciation. For example, this process is not carried out for residential real estate, some types of livestock and plantations, certain types of writers, land andetc.

Accounting for fixed assets

The whole process of working with fixed assets is fully reflected in accounting. Each individual element has its own rules and wiring, which should not be neglected. Conventionally, all this can be divided into 5 main groups. The first of these is the acquisition of the facility and its commissioning. There are different types of fixed assets, so sometimes a lot of time passes between these concepts. The next stage refers to the depreciation described above, after which the costs are taken into account to restore the worn out tool in one way or another. And two more stages can either be directly related to the first three, or take place separately - disposal and rental of the object. All these are parts of accounting that differ both from each other and depending on the features that the current composition and structure of fixed assets has, the factors of the enterprise's functioning, and so on.

Analysis

In addition to all other features of accounting, with some frequency, an enterprise can make a special analysis of the composition of fixed assets, which in theory can increase the efficiency of work and the overall return on objects. The most common tasks are the ability to find some previously unaccounted for reserves that would increase the life of the equipment or otherwise improve its economic efficiency. Also, such an analysis gives a fairly accurate picture of how and how all divisions of the company are equipped with the necessary facilities, howspecifically and with what load they are used, how much is left until the write-off, and so on. In case of suspicion, the same analysis will 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 state of affairs.

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 the installation and launch of the product. Thus, the cost of an 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, free of charge. In this case, an additional assessment should be made, based on existing market prices. Revaluation is done in the same way. It can take place only once at the beginning of the reporting period.years based on documents evidencing changes in the cost of the product.

Inventory

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 get to it, dubbing on other structural elements is allowed. Among other things, sometimes there is a special table attached in a certain place, which lists all the objects with their numbers located in this room.

Efficiency in use

In order for fixed assets to be used with the maximum possible return, their effectiveness is constantly assessed. It is responsible for whether this or that object really fully performs all its functions, whether there are any downtime or other similar problems. As a rule, this allows you to timely detect negative factors affecting the operation of the enterprise and quickly eliminate them.

Summary

Given all the information provided above, we can conclude that the composition of fixed assets, their accounting, control and timely implementation of all required accounting actions in the balance sheet make it possible to influence the overall efficiency of the enterprise, the quality of production, workload and etc. In some cases, such information can significantly increase the economic performance of the company, whichwill have a positive impact on its profitability.