How to account for fixed assets in accounting

The main means are material values, which are used in the production of goods, for the performance of various works and services, in the management of companies for a period exceeding 12 months, regardless of their value. And those items that at the time of purchase at a cost exceed a hundred times the minimum level of monthly wages, and which do not depend on the useful life.

Fixed assets in accounting are buildings, buildings, machinery and equipment that are used for basic activities, measuring instruments, computers, perennial plantations, productive livestock, roads, vehicles and other fixed assets. And also, subsoil, forests, rivers, land plots, both own and leased. All capital investments and improvements are also recorded annually in fixed assets.

Machines and equipment and those items that are on the way are stored in warehouses as finished goods, purchased for sale as a commodity, put into installation are not considered fixed assets and they do not accrue depreciation.

All fixed assets in accounting are conventionally divided according to their purpose into two large groups: production enterprises that directly participate in the work of the enterprise (machinery, equipment, shops, transport) and non-productive fixed assets (buildings, baths, hostels, canteens, etc.) Which do not participate in the process of production itself, but affect the process of manufacturing products or performing work by the enterprise.

By the degree of use, fixed assets in accounting are divided into own, leased, in reserve, for conservation, reconstruction or at the stage of completion. The fixed assets that are acquired from the supplier, received free of charge as a gift, are contributed by the founder to the authorized capital and other income.

Upon admission, fixed assets are accounted for at historical cost. This can be the cost specified by the supplier under the contract or invoice, but taking into account all costs for the delivery, installation and installation of equipment. If the fixed asset is contributed by the founder to the authorized capital, the original value is negotiable and is reflected in the acceptance-transfer certificate. In case of donation, the initial price is the market price of the item.

The accounting records restorative, liquidation and residual value of the fixed asset. Under replacement cost is understood the value that will need to be paid at the market price when replacing the fixed asset with a new one, similar if it is unfit for use.

The residual value is the difference between the original cost and the amount of depreciation. Amortization in accounting is a uniform distribution of the value of a fixed asset over the entire useful life period. Thus, physical and moral depreciation is written off. At production, the amount of depreciation is transferred to the cost of production. When you submit the tax return, the amount of depreciation is taken completely for deductions.

When calculating depreciation for accounting, the difference between the initial and liquidation value of the funds is taken. The liquidation value is understood as the value that the enterprise expects to receive after its complete depreciation upon the sale or liquidation of the fixed asset. The liquidation value is more convenient to be considered equal to zero in order to avoid misunderstandings during tax audits. This must be reflected in the accounting policy of the enterprise.

Monthly accounting of depreciation of fixed assets for all fixed assets used for the operation of the enterprise is maintained. Begin the accrual of depreciation from the 1st day of the month following the month of commissioning of the fixed asset. Complete the accrual of depreciation from the 1st day of the following month after it has been disposed of or completely written off of its value from the balance sheet. Depreciation is charged for the entire useful life period during which the enterprise receives income. Do not accrue depreciation on land, subsoil, monuments and works of art, library funds.

In the tax account 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.

Retirement of fixed assets occurs when written off in case of unfitness under the write-off (OS-4) and defective statement. The basic means can be sold, donated, formalized under the contract and corresponding invoices and invoices. You can make a contribution to the authorized capital in another organization under the act of reception and transmission (OS-1). Or arrange a lease, lease.