Tangible non-current assets in the company's balance sheet

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-17 18:37

All organizations must keep records of assets. Any enterprise has assets that are often used in commercial activities, but remain unchanged. The process of accounting for them sometimes causes a lot of difficulties.

Definition

Tangible non-current assets in the balance sheet is a kind of property that is registered with the organization and is used by it to implement tasks. Such assets are attracted to generate profit over a long period of time (more than 1 year).

Tangible non-current assets are the monetary value of the property and liabilities of the organization. All of them are fully or partially used in the process of creating products and transfer their value to the finished product.

The materialization coefficient shows the degree of security of the OS organization:

Kma=AI/A, where

AI is the cost of MNAnon-current assets) in the balance sheet;

A - balance sheet total.

The organization's property is characterized by the following parameters:

1. Purchase Purpose.

2. Useful life.

3. Form of assets. Its volume is affected by:

• external factors: the situation in the country, market conditions, inflation, the level of state regulation of the economy, the legislative framework, the availability of loans;
• internal factors: turnover, terms of delivery, organization of work.

IMA:

• Meet the need of the enterprise for material resources.
• Used for timely settlements with counterparties in full.
• Ensure value for money.

Legislative regulation

At the state level, a number of NAPs have been developed that regulate the process of asset accounting. In particular, Federal Law No. 208 describes in detail the structure of capital (Article 25), the minimum requirements for its size (Article 26), the process of changing the amount of capital (Article 26-30), as well as issues of protecting the rights of a creditor and issuing securities (vv. 31-33).

The norms of this Federal Law apply only to JSCs. ZAO and organizations of other forms of ownership have their own accounting rules. In particular, Federal Law No. 402 describes in detail how to account for tangible non-current assets and liabilities of an organization.

Classification

The asset accounting process is reflected in legislative acts. For a correct interpretation of the rules, you must first familiarize yourself with the speci alterms.

NMA	Assets that do not have a monetary form, such as property rights.
OS	Property used to manufacture products for more than one year.
Non-current assets profitable investments in material assets	Movement of funds in investment projects to generate income.
Financial investments	Investment in capital of other enterprises.

Represented tangible non-current assets in the balance sheet of a small business are used/redeemed for more than 12 months, while current assets circulate for less than a year.

Intangible assets also include vehicles, buildings and real estate that are used to solve production problems: transportation, processing, modernization and storage of residues. The balance sheet reflects tangible non-current assets as follows:

• balance line code 1110 – intangible assets;
• 1120 – Developments;
• 1150 - OS;
• 1160 - material values;
• 1170 - financial investment.

Let's look at each of these articles in detail.

Intangible assets

1110th line of the balance sheet "tangible non-current assets" is used to reflect trademarks, software and art objects for which the organization has unique rights. The article is filled in according to account 04 minus account 05. That is, the residualasset value. The results of R&D, which are reflected under article 1120, are entered at the initial cost from the subaccount of the same name.

Search Assets

These non-current tangible assets (line 1130) reflect the cost of work to search for mineral deposits in a particular area. Information is entered from sub-account 08 of the same name, taking into account depreciation (account 05). The same organizations fill in line 1140, which reflects the cost of structures, vehicles used in the work. The specified values are reflected taking into account depreciation (account 08 - account 02).

OS

Tangible non-current assets (1150) whose value exceeds 40 thousand rubles. with a period of use of more than 12 months, are classified as fixed assets. They are reflected in the balance sheet at residual value, that is, taking into account depreciation (account 01-account 02).

Income and financial investments (part 1)

Property that is rented or leased is also reflected in the balance sheet at the residual value in line 1160. Financial investments mean contributions to the management company purchased by the Central Bank of other organizations. Line 1170 reflects the initial cost of long-term investments (the circulation period is more than 12 months). Information is entered from the debit balance of the account. 58, ch. 55, ch. 73. If an organization creates provisions for the impairment of such assets, then they should also be accounted for in line 1170.

Financial investments also include issued interest-free loans. Their sumis reflected not in line 1170, but in accounts receivable (1190). The cost of shares repurchased from the founders should also be reflected not in investments, but in liabilities (p. 1320).

Deferred Assets

Line 1180 is filled in by organizations that apply PBU 18/02. This is where the debit balance is shown. 09 at the reporting date. If tax liabilities are shown on a net basis, a different procedure is used. The positive difference between 09 and ch. 77 is reflected on line 1180, and negative - in liabilities on line 1420.

Other intangible assets

Line 1190 reflects information on non-essential assets. This may be the residual value of R & D, repair costs, capital investments that were a work in progress. Each organization develops the criteria for attributing expenses to this article independently.

Stocks

Line 1210 of the second section of the balance sheet should reflect data on materials, products, raw materials in production. This also includes information about inventory, inexpensive office furniture, stationery, which are not written off at the end of the reporting period. Information is entered into the balance sheet from account 10. If the organization uses discount prices, then the report reflects the difference between the account. 10 and ch. 16. If, in addition, the organization creates a reserve for the purchase of inventories, then the credit balance of the account should be deducted from the figure obtained. 14.

Information on unfinished production is reflected from accounts 20-23 and c. 46. Cost of transport costs for deliverygoods are usually included in the cost price. Then the information is entered into the balance sheet from account 41. Inventory is reflected at the actual cost (account 41 - account 42).

VAT

Line 1220 should reflect the balance of the amount of VAT presented for payment. Zero balance is allowed. If the organization did not accept the tax for deduction and did not include it in expenses. This situation may arise if an error is detected in the received invoices, the products have a long production cycle or are sold at a zero rate. The debit balance of the account is entered into the balance sheet. 19.

Accounts receivable

DZ includes debts:

• for goods delivered to customers;
• for listed supplier advances;
• for undisbursed funds to accountable persons;
• on taxes, etc.

Line 1230 reflects the debit balance of accounts 60, 62, 68, 69. All companies are required to form a reserve for doubtful debts. The amount reflected in account 63 should be deducted from the value of the debt.

Financial investments (part 2)

Line 1240 reflects the value of short-term investments in the form of loans, bills, etc. The balance sheet contains data on the residual value of investments, taking into account the formed reserves (the difference between account 58 and account 59).

Cash

Line 1250 reflects information on the balance of funds on hand, on settlement accounts and on cash equivalents, for example, deposits "on demand". Deposit accounts are included in long-term or short-term investments. Funds in foreign currency are converted into rubles at the bank rate at the time of reporting.

Other OA

As part of other assets (1260), information about property that did not fall into all of the above items should be reflected. This may be the amount of accrued VAT, revenue not recognized in the current year, shortages not written off, etc.

Simplified balance

Small businesses often use simplified reporting forms when compiling a balance sheet. The abbreviated form consists of five asset lines and six liabilities. It would seem that balancing would be very simple. In practice, accountants have to face a number of difficulties.

Structure

The simplified balance sheet shows a summary of assets and liabilities.

String	Formula for calculating the balance (account)
Asset
Tangible non-current assets: fixed assets, capital investments.	01 + 03 + 07 + 08 - 02
Financial assets: intangible assets, investments, development results	Intangible assets (04 - 05), investments (58 + 55), developments (08 + 04)
Stocks: raw materials, WIP, products, goods	10 + 20 + 41 + 45 + 43
Cash (CF)	50 + 52 + 55 + 57
Other assets: short-term investments, VAT,accounts receivable	58 + 19+ 62 + 69 + 68 +70…76
Passive
Capital: authorized, additional, reserve, retained earnings	80 +…+ 84
Long-term loans	67
Other long-term loans	77 + 96
Short-term loans	66
Accounts payable	68 +…+ 71 + 76
Other current liabilities	96

Each line corresponds to a specific code. If you need to specify several indicators in one line, then the code of the article that has the largest share is put.

Example. At LLC, the line “tangible non-current assets” includes fixed assets in the amount of 200 thousand rubles. and capital investments in the amount of 80 thousand rubles. The cost of the purchased equipment is more than the investment amount. Therefore, tangible non-current assets (line 1150) in the amount of 280 thousand rubles will appear in the balance sheet. If the company has nothing to write down in some line, then it is simply not brought into the balance sheet.

Newly created organizations that have not yet conducted activities cannot show an empty balance. The report should reflect at least two transactions: the source and the process of formation of the authorized capital (DT75 KT80). Most often, shareholders contribute cash (DT51 KT75) orprovide OS as a clade (DT01 KT75). Then the entry is made on the corresponding line "tangible non-current assets" in the balance sheet of a small enterprise.

Example

LLC fills in a simplified balance sheet at the end of the year. As of December 31, the organization has the following assets:

• purchased fixed assets (account 01) - 100 thousand rubles. - tangible non-current assets (line code 1110);
• cash (account 51) - 10 thousand rubles. – line code 1250;
• debt of buyers - 15 thousand rubles. – DZ (line code 1260).

Total assets: RUB 125,000

Liabilities:

• UK + Profit: 115 thousand rubles. - line code 1310.
• Accounts payable (for wages, to contractors, to the budget) - 10 thousand rubles. – line code 1330.

Total liabilities: RUB 45,000

Cost estimate

Before selling an organization, its market value is calculated. For this purpose, such an indicator as net assets is determined. Based on data from the balance sheet. All liabilities are deducted from the value of assets. The remaining figure is the market value of the organization. If, as a result of the calculations, a negative value is obtained, then the obligations of the organization are several times higher than the value of the property. The calculation does not include the value of shares that the company bought back from the founders, and the value of stocks. The fact of ownership does not guarantee a profit.

Tangible non-current assets are usually estimated using the excess profit method. It is based on the assumption that part of the profit may exceed the "normal" profitability and be converted into an intangible asset - "goodwill". Calculation algorithm:

• Determining the value of assets and liabilities.
• Calculation of operating profit.
• Determine the rate of return of OA, which will then be used to calculate the "excess profit".
• Determination of the rate of return of intangible assets, on which "goodwill" will then be calculated.

Before making calculations, the articles are adjusted:

• Securities are translated at market value.
• Receivables are being cleaned to identify debts that can still be collected.
• It is better to calculate the cost of goods and materials at the real selling price.
• From the upfront costs, remove the part that does not pass to the buyer, and add expenses that were not recorded in assets.
• The cost of furniture and equipment is best determined by the substitution method, that is, taking into account wear and tear, or at the market price.
• Debt issued to secure real estate should be removed from the balance sheet.

From liability items, only promissory notes and deferred tax payments will need to be adjusted in some situations.