Features of determining depreciation elements for fixed assets and their adjustment

Abstract

Importance: depreciation is a mandatory process for the majority of non-current assets used by an economic entity. In the regulatory documents adopted in recent years, a new term has appeared – depreciation elements. The determination of each of the established elements (useful life, liquidation value, method of depreciation) should be justified by the professional judgment of employees. Objective indicators, at the time of recognition of the object of fixed assets for accounting, may cease to be the same over time, and, therefore, should be adjusted. This approach allows you to generate high-quality accounting information and comply with the requirements of current regulatory documents. Purpose: to investigate the essence of each of the depreciation elements, identifying their distinctive features, the consideration of which is mandatory when justifying the choice of an organization, as well as to systematize the factors influencing the change in the values established by the organization. To investigate the frequency and order of reflection of changes in depreciation elements in the accounting of an economic entity. Research design: based on the analysis of regulatory documents and accounting practices, the essence of each element of depreciation was investigated, the characteristic features of the useful life, the operational cost and the method of depreciation were determined, as well as the factors influencing the studied categories over time were systematized. Results: the approaches to the definition of depreciation elements when recognizing an object of fixed assets in accounting and the need for their adjustment in the following reporting periods are substantiated. The ways of reflecting the adjustments of the estimated values are presented.