The concept and classification of fixed assets, their valuation.

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2018-03-19 07:31:23

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In the production process along with the objects of labor are means of labour or, in other words, fixed assets. These include equipment, machinery, inventory (both economical and production) and other means of production through which the activities of the organization. In addition, the consumer durables also include structures and buildings, the transfer device directly on the subject of work is not affected, however, create the required conditions for the realization of the production process.

To generalize groups all long-term assets, classification of assets. All the means of labor of the enterprise in the long period involved in the production, while maintaining its initial cost. But, however, they gradually grow old and wear out, and therefore reflect their value to the newly created product.

The Concept, classification and valuation of fixed assets is very important in accounting. You should know that in order that property could be related to long-term assets, shall be subject to the following two conditions:

  1. Their beneficial use shall be for a term exceeding one year;
  2. Must be complied with the set limit value per unit of the means of labor.

Classification of fixed assets is carried out on the basis of several criteria:

  • In accordance with the type of activity (for example, in engineering there will be some long-term assets in construction are completely different, and trade the third, etc.);
  • The nature of the business (there are production and non-production);
  • Participate in the process of production and circulation, they are divided into active and passive;
  • Belonging to the subject of managing fixed assets can be company-owned or leased;
  • In fact the usage (in use, under construction, in stock, on preservation).

It Should be noted that the concept and classification of fixed assets – it's not all that advisable to know. Like everything else, long-term assets of the organization require proper detailed record keeping. It is aimed at:

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- monitoring and documenting the movement of funds in the context of individual and groups of objects;

control over their safety and efficient use;

a correct and timely determination of depreciation for inclusion in the costs of production;

- accurate accounting of the liquidation and write-off of fixed assets;

- accurate and timely reflection of the amounts expended in their repairs;

control over the integrity and safety of long-term assets that are mothballed.

Classification of fixed assets stipulates that they can come into the organization from suppliers or as a result of construction. While in the accounting records upon the receipt of money from vendors must be invoice (shipping), and the act of reception-transfer of object (possibly of groups of objects) of fixed assets. If the assets expendable property received by the organization as a result of construction, the acts about acceptance-transfer are drawn up after its completion.

In addition to the above long-term assets of the organization can be classified according to types: tool, vehicle, equipment, perennial plantations, productive and working cattle, and others. It should be noted that the classification of fixed assets according to their types is the basis of reporting on the actual availability of assets of the organization movement.


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Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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