Lecture 4.

FIXED ASSETS OF ENTERPRISES

Plan of the lecture1. The concept, composition and structure of

fixed assets2. Depreciation and amortization of fixed assets

of enterprises

1. The concept, composition and structure of fixed assets

Fixed assets - part of the property used as a means of labor in the production of products (works, services).

Fixed assets include buildings, structures, operating and power machinery and equipment, measuring and control devices and equipment, computers, vehicles, tools, production and household equipment and supplies, working, productive and breeding livestock, perennial plants.

Fixed assets also include capital expenditures by an enterprise (company) in perennial plantings and directed to land reclamation (drainage, irrigation and other reclamation work) and in the leased assets.

Depending on the purpose and functions in the production of fixed assets on the composition divided into productive and non-productive.

Production plant and equipment operate in the sphere of material production, often involved in the production process, they wear out gradually and transfer their value to create products (works, services) units, as depreciation.

Non-productive fixed assets are not involved in the production process and are intended for non-industrial use.

These include on the balance of the company health facilities (hospitals, health part, health centers, health resorts, etc.), physical education and sports (sports palaces, swimming pools, skating rinks, sports centers, sports schools, etc.) , public utilities, social and cultural spheres (hostels, residences, spas, clubs, kindergartens and nurseries, theaters, etc.).

2. Depreciation and amortization of fixed assets of enterprises.

Under wear should be understood as a process of gradual and expected losses of any artificially created object functional qualities associated with the operation and / or obsolescence. Depreciation reflects the loss of consumer properties of the object and a corresponding decrease in its value.

Depreciation of fixed assets is in two forms: the moral and physical depreciation.

Moral depreciation occurs before the onset of complete physical deterioration.

Physical depreciation of fixed assets - is the loss of their original use value, which is why they are gradually worn out and must be replaced with new ones.

Accordingly, the depreciation charges - monetary value of the size of depreciation corresponding to the degree of depreciation.