Methods for assessment of fixed assets

Abstract

Purpose: disclosure of methods of assessment and formation and disclosure in corporate accounting and reporting of information on changes in the value of fixed assets. Discussion: at present, the inflation factor is a constant phenomenon in the economic life of many countries of the world, including Russia. Corporate reporting, formed without taking into account the inflationary factor, does not provide an adequate reflection of business processes and the possibility of making informed economic decisions by users. Even moderate inflation distorts information in corporate statements prepared on the basis of traditional accounting estimates, confusing corporate management when assessing financial resources and productive capital. In conditions of inflation, the assessment takes on particular importance, since it allows you to reflect in the reporting the elements that make up capital. Influence of the inflationary factor causes an increase in the current market value of assets and its deviation from the initial cost (actual cost price) of their acquisition. Undervaluation of assets and overestimation of profits affects the indicators of the rate of return and profitability, increases the taxable base and contributes to the withdrawal of part of the equity capital from the corporation. The need to invest in each operating cycle of a larger amount of money compared to the previous one causes the need for an external source of financing, in particular, attracting borrowed funds, which is really not for all corporations, can cause delays in making settlements and other negative phenomena. Inflationary processes necessitate a transition from measurement at actual cost (initial cost) to fair value. Results: disclosed the influence of risks of loss of asset value on the performance of the corporation.