Categories of recognition of fixed assets. Future economic benefits. Initial cost of fixed assets. Accounting for the acquisition of fixed assets. Subsequent costs: capitalization and period expenses. Subsequent accounting of fixed assets: accounting of historical cost, revaluation of fixed assets. Depreciation of fixed assets: useful life and accrual methods, reflection in accounting. Disposal of fixed assets: recognition and disclosure in accounting.

As a result of studying this topic, students should learn:

Determine the value of non-current assets at initial recognition,

and also distinguish capital costs from ongoing repair costs;

Describe and explain the rules in IAS 16 regarding the revaluation of property, plant and equipment;

Take into account profits and losses upon disposal of revalued assets, incl. compensation for impairment losses;

Calculate depreciation on revalued assets and complex assets containing two or more elements.

Introduction

For many organizations, especially those engaged in production, the balance sheet item

"Fixed Assets" is the most significant. Therefore, it is very important to correctly evaluate and take into account this type of asset. The principles of accounting for fixed assets are determined by IAS 16 “Fixed Assets”.

All basic operations and complexities associated with accounting for fixed assets

(OS) can be divided into the following categories:

Recognition of fixed assets;

Initial assessment;

Capitalization of borrowing costs;

Transactions on the exchange of fixed assets;

Subsequent costs;

Depreciation;

Subsequent evaluation and revaluation;

Impairment;

Derecognition;

Presentation in reporting,

Fixed Asset Accounting

Fixed assets are tangible assets that:

Intended for use in the production or supply of goods and services, for rental or administrative purposes;

Intended to be used for more than one reporting period

Recognition of fixed assets

As mentioned earlier, fixed assets often make up the majority of a company's total assets, and therefore they are a significant item in the financial statements. Determining whether a cost should be recognized as an asset or as an expense will have a significant impact on the organization's results of operations. Therefore, before addressing the issue of the cost at which fixed assets should be accounted for, it is necessary to make sure that these objects satisfy the basic criteria for asset recognition.

An asset is recognized when the following are satisfied simultaneously:

criteria:

It is probable that the entity will receive future economic benefits from the use of the asset;

The cost of an asset can be reliably estimated.

In order to determine whether an item satisfies the requirement of the first criterion, the entity, at the time of initial recognition, must assess the extent to which it is reasonable to obtain future economic benefits. It is reasonable that an entity will receive future economic benefits from owning an asset if all the risks and benefits of owning the asset are transferred to the entity. Until this point, the asset purchase operation can be cancelled.

The requirements of the second criterion are satisfied when we can determine the cost (initial cost) of the object.

Initial assessment

An item of property, plant and equipment that can be recognized as an asset must be measured at cost.

Cost is the amount of cash or cash equivalents paid, or the fair value of other consideration given for an asset, at the time of its acquisition or construction.

Initially the OS object must be recorded in the books of accounts

at a cost corresponding to the amount paid directly for the asset itself, taking into account all other costs that had to be incurred in order to prepare the purchased asset for use.

In the case where the asset is created in-house, the cost includes the cost of materials, wages of workers involved in creating the asset, and other capitalized costs.

It is important to understand that costs can be capitalized if and only if they either add value/utility to the asset or are unavoidable to bring the asset into service.

A significant limitation is that, as a result, the total capitalized cost of the asset must not exceed its fair value.

If an entity produces for its own consumption an asset that is similar to an asset it produces for sale in the normal course of its business (for example, assembling a computer), then the cost of the asset is usually equal to the cost of producing it for sale. At the same time, it is important not to forget that internal profit arising as a result of production (for example, when invoicing for work performed by one department to another division of the company) should be excluded when calculating the value of such assets.

It is very difficult to determine all types of costs that need to be included in the cost of the acquired fixed asset item, since they largely depend on the specific item. However, the following are the main costs that are subject to capitalization.

The cost of operating systems at the initial assessment includes:

Purchase price (including import duties and non-refundable purchase taxes, less trade discounts);

Direct costs of bringing an asset into a state of readiness for its intended use, for example:

Costs for site preparation (as well as for demolition of existing buildings on the land);

Delivery and unloading costs;

The cost of professional services such as architects, engineers, appraisers and intermediaries;

An initial estimate of the future costs of liquidating the asset and restoring the site on which it was located; to the extent that the estimate is recognized as a provision in accordance with IAS 37.

Future costs of asset disposal and site restoration added during operation.

In addition to the above, this includes:

The cost of buildings includes the costs of repairing or preparing the building for use, the cost of necessary permits, insurance paid during the construction of the building; other overhead costs associated with construction;

The cost of machinery and equipment includes the costs of installing, configuring and testing the machinery and any other costs associated with preparing the equipment for operation. For example, the costs of a trial run, minus the net proceeds from the sale of products released during the trial run.

Despite clear rules, the classification and characteristics of the costs required to bring an OS object to a state of full readiness remains the subject of assessment by a specific expert.

It is important to note that general and administrative expenses are not eligible for capitalization. The same applies to the costs associated with selecting the acquired asset and determining the necessary requirements for its characteristics.

Capitalization of borrowing costs

If an asset is purchased on deferred payment terms for a period exceeding normal lending terms, then the cost is equal to the purchase price. The difference between this amount and the total payments is recognized as interest expense over the life of the loan, unless it is capitalized in accordance with the permitted alternative accounting treatment in IAS 23.

Exchange of fixed assets

An organization can acquire an asset not only for a fee, but also by exchanging it for another asset/assets.

When one asset is acquired in exchange for another asset, the value of the acquired asset is measured at fair value. The fair value of the transferred asset can also be taken as the basis for the assessment, if it is more accurately and easily determined.

Exceptions:

The transaction is not commercial in nature;

Fair value cannot be determined reliably.

Subsequent costs

After the asset is put into operation, capitalization of costs stops. But, most likely, the organization will incur subsequent costs associated with maintaining and maintaining the asset in working order. From time to time, an organization may have the desire and opportunity to improve an asset. All costs that arise for an asset during the period of its use (current and major repairs,

improvements and modernization) can be:

Charged to period expenses;

Capitalized into the value of the asset.

Replacing Components

Some complex fixed assets (aircraft, ships, gas turbines, etc.) can be considered a group of related components that require regular replacement at varying intervals - and thus have different useful lives. If, when replacing one of the components, the conditions for recognition of a tangible asset are met, then the corresponding costs must be added to the carrying amount of the complex item. Then the replacement operation is considered as a sale (disposal) of the old component (i.e. its recognition ceases).

Follow-up assessment

IAS 16 provides two models for accounting for property, plant and equipment;

Model at original cost;

Overvalued model.

Historical cost accounting model

An asset is accounted for at historical cost less accumulated depreciation and accumulated impairment losses.

Revaluation accounting model

An asset whose fair value can be measured reliably is stated at its revalued amount less accumulated depreciation and subsequently accumulated impairment losses.

The basis for using this method is the fact that, as a result of inflation, even small deviations from the current value in one reporting period can lead to significant distortions in the long term. As a result, the value of the asset reflected on the balance sheet, as well as the expenses included in the income statement, lose their economic meaning.

At various times in different countries, securities commissions have tried to introduce special additional adjustments to the reporting of organizations in order to reflect the effect of inflation. This is especially important for manufacturing organizations where fixed assets are a significant part of all assets. However, there is still no single method and approach to solving this problem. In this regard, IFRS

(IAS) 16 proposes a method of accounting for property, plant and equipment at their fair value.

Having applied the fair value method once to accounting for property, plant and equipment, the company must consistently apply it during all subsequent periods to all groups and items of fixed assets to ensure comparability of results. The frequency of revaluation depends on how often market prices for the relevant types of assets change. However, a review of the cost must be done at least once every three or five years.

For fixed assets such as land and buildings, fair value corresponds to market value as determined by a professional appraiser using conventional valuation techniques.

When determining the fair value of plant and equipment, market value at the time of revaluation is usually used. But sometimes, due to the specifics of the equipment, it is very difficult to determine its market value. In such a case, replacement cost adjusted for depreciation can be used as fair value. At the same time, by replacement we mean not just similar equipment, but equipment that has the same capabilities as the one being evaluated.

Revaluation can be carried out in two ways:

Proportional change method. In practice, this method is applied as follows: First, fair value is determined. It is then compared with the residual value, resulting in a proportion. Then, in accordance with this proportion, the initial cost and accrued depreciation change (increase/decrease). As a result, after all of the above steps have been taken, the new residual value should be equal to the fair value.

Write-off method. This method is characterized by the fact that first the entire amount of accrued depreciation is written off to the fixed assets account, and then

the resulting value is revalued (increased/decreased) in such a way that it becomes equal to fair value (i.e., the new initial cost becomes equal to fair value, and accumulated depreciation is reset to zero). Of course, this approach is much simpler, but it has one very significant drawback. There is no information on accumulated depreciation in the reporting, and it is very difficult to draw a conclusion about how worn out the fixed assets are. This method is most often used

in relation to buildings.

In both cases, the difference from revaluation should be attributed either to the account of revaluation reserves in the capital section, if the difference is positive, or to the statement

about profits and losses in the line other losses if the value has decreased. The difference in the revaluation of depreciation is charged to the same account as the revaluation of the original cost.

In addition, if the revaluation is not primary, then the decrease in value will be carried out first by reducing previously recognized revaluation reserves

and only then be included in other losses in the income statement. An increase in the value of an asset during repeated revaluations must first compensate for the earlier

recognized losses in the income statement, and only then create reserves.

This is presented schematically in the following table.

It is noteworthy that the reserve itself in the capital section must be “depreciated”

to the account of retained earnings simultaneously with depreciation of the fixed asset, without being reflected in the current financial results. When an asset is disposed of, this reserve is added to retained earnings.

When revaluing an asset, the entire asset group to which the object belongs must be revalued.

Additional/devaluation is carried out individually for each object.

Depreciation is a systematic reduction in the depreciable cost of an asset over its useful life.

Amortized cost- this is the cost of the asset, or other substitute

its amount reduced by the amount of liquidation value.

Book value is the amount at which the asset is taken on the balance sheet less the amount of accumulated depreciation and accumulated impairment loss.

Liquidation value is the net amount expected to be received for the asset at the end of its useful life less the expected disposal costs.

Useful life is either the expected/estimated period of time over which the asset is used in the entity's activities, or the quantity of products or similar items that the entity expects to obtain as a result of the use of the asset.

With the help of depreciation, the basic principle of accounting is implemented, namely the correlation of the costs of acquiring a fixed asset with the corresponding income that the organization receives from its operation during its useful life. Thus, depreciation is a strategy for allocating costs, and therefore, all fixed assets, except land, must be subject to depreciation, even if their value increases over time.

Depreciation period

Depreciation begins when the asset is ready for use and continues to accrue until derecognition. Depreciation is charged even if the asset is not used.

Depreciation expenses

In order to determine depreciation expenses in each period, you must have the following information:

Expected salvage value;

Depreciable cost;

The expected useful life, which must be reviewed by the company on a periodic basis because due to the influences of various events

(eg asset retirement policies) it may change.

Expected useful life is the period of time over which the company estimates that the asset will be used. It is determined by the organization

based on the following factors:

The expected amount of use of an asset, which is estimated based on its expected capacity or physical productivity;

Estimated physical wear and tear, depending on production factors;

Technological obsolescence;

Legal or other restrictions on the use of an asset.

Depreciation methods

The depreciation method used should reflect the pattern in which the company consumes the economic benefits derived from the asset.

IAS 16 defines three main methods for calculating depreciation charges:

Linear method;

Accelerated depreciation methods;

The method of writing off cost in proportion to the volume of products produced/work performed/services rendered.

Whatever method of depreciation is chosen, the accounting entries remain unchanged. Only the specific amounts in each period will be different.

The choice of a specific depreciation method remains with the company, and auditors rarely question the correctness of this choice, as long as the method used is permitted by the standard. It is very important that a company takes seriously the choice of depreciation method from the point of view of best reflecting in the accounting the order in which the cost of assets is transferred to expenses.

In addition, different categories of assets may be depreciated using different methods. In any case, the depreciation methods adopted in accounting policies must be applied consistently in each period to ensure comparability of the company's financial results. But this does not mean that the method used cannot be changed.

Moreover, IAS 16 requires periodic critical review of the accounting methods used for property, plant and equipment. If there is good reason to believe that a different depreciation method will more accurately reflect financial results, then switching to the new method is considered a change in accounting estimates.

(discussed in more detail in the corresponding section) and is reflected in the reporting prospectively, i.e. in the current and future reporting periods.

An organization's repair and maintenance accounting policies can affect the useful life and salvage value of an asset, either increasing or decreasing them. However, such a change should not entail a change in depreciation methods.

Linear method

This is the simplest and most common method of calculating depreciation, characterized by the fact that the depreciable cost of an asset is written off as expenses in equal parts over the entire useful life of the asset. The annual amount of depreciation is calculated as follows:

(Original cost - Salvage value)/ Useful life

Accelerated depreciation methods

IAS 16 specifies only one method of accelerated depreciation, namely the declining balance method. However, another method of writing off cost based on the sum of the numbers of years of useful life is used in practice very often and does not contradict the basic requirements of the standard.

Method of writing off cost by the sum of the numbers of years of useful life (USL) (cumulative)

This method takes into account the fact that when an asset is new, it generates more benefits than when it is worn out. Accordingly, in the first year depreciation expenses should be greater than in the second, in the second year more than in the third, and so on. This method is an example of accelerated depreciation.

The formula for calculating using this method is as follows:

Remaining number of periods

depreciation (including current)

Norm ____Depreciable depreciation cost

where: SSL is the sum of the numbers of years of useful service life. This amount can also be calculated using the formula:

CCHL = N*(N+1)/2

where: N is the expected useful life.

For example, if an asset has a useful life of 5 years, then

HSP = 5 + 4 + 3 + 2 + 1 = 15 or HSP = 5 * (5 + 1) / 2 = 15

Thus, in the first year 5/15 of the asset's cost will be depreciated, in the second year - 4/15, and so on.

Reducing Balance Method (DRM)

This method uses a depreciation factor like the straight-line method, but multiplies it by an additional factor depending on how quickly we plan to depreciate the property. A significant difference between this method and the straight-line depreciation method is that the depreciation coefficient is applied not to the depreciable cost, but to the residual (book value) of the object.

Unlike other methods, in order to estimate the amount of depreciation expenses in any year, it is necessary to make a consistent calculation for all previous years.

Very often, the double declining balance method is used during the first half of the useful life, with a transition to the straight-line depreciation method in the second half of the life. It is important to note that the depreciation acceleration rate can be chosen by the company independently.

Formula for calculation:

Method of writing off costs in proportion to production volume

Not all depreciation methods are based on spreading the cost of an asset over time. In some cases, a more rational approach would be to correlate the cost with the number of products produced (services provided). This method is most suitable for equipment depreciation, when productivity is defined in technical documents by limiting the number of units of production or the number of machine hours worked.

Acquisition and disposal of assets during the reporting year

IAS 16 does not provide specific guidance regarding the calculation of depreciation on the acquisition and disposal of assets in the middle of the reporting period. However, the basic principles on which the system of standards is built require the necessary correlation of expenses and income by period, and thus, the more accurately an organization correlates depreciation expenses with income from the use of relevant assets, the better. The limitation in choosing the frequency of depreciation and, accordingly, the rule about the beginning and end of the period are determined, first of all, by the principle of rationality and the materiality of costs. The principle of rationality consists in assessing the ratio of the costs of implementing existing accounting with more accurate accounting and the benefits of having such accuracy.

But the most common method is the so-called “monthly convention”, when depreciation expenses are accrued monthly and in the month of acquisition 1/12 of the annual depreciation amount is recognized, and in the month of write-off it is not recognized at all. Most likely, the choice of a specific method should be determined by the organization's reporting frequency.

Impairment losses

To determine whether there has been a decrease in the value of an asset, IAS 36 is used, which considers the accounting treatment for:

Depreciation or loss of an asset;

Appropriate compensation from third parties (eg, compensation from insurance companies for fire losses, government compensation for land expropriated for road construction);

Subsequent restoration, purchase or construction of the asset.

These events must be accounted for separately (in accordance with IAS 36, IFRS-14 and IAS 16). However, compensation should be included in the income statement at the time of recognition, by subtracting it, either from the amount of impairment, loss, or from the cost of a new asset and should not be recognized as deferred income.

Derecognition of fixed assets

The asset must be written off from the balance sheet as an asset:

Upon his departure;

In the event that a decision is made to discontinue its use;

If no economic benefits are expected from its use;

When reclassified as an asset held for sale.

Gains or losses arising on the disposal or disposal of an asset should be determined as the difference between the estimated net proceeds from disposal and the carrying amount of the asset and recognized as income or expense in the income statement.

An asset must be deregistered not only when it is sold or physically dismantled and disposed of, but also, in accordance with the requirements of the standards, at the moment when it ceases to bring economic benefits to the company, because it no longer meets the basic definition of an asset.

If this fixed asset not only ceases to be listed as an asset, but is completely written off from the balance sheet, then at the same time, profit or loss must be recognized in the current financial results. The only reason why an unused asset might be retained is to ensure that the asset's mothballing is temporary.

When an asset is disposed of, all related accounts are closed: the asset account itself, the corresponding accumulated depreciation account and the impairment allowance account.

Similarly, all costs associated with the execution of the transaction, as well as dismantling costs, are involved in determining the financial results from the disposal of an asset.

In addition, if a company accounts for property, plant and equipment at fair value, then all amounts of accumulated revaluation reserves associated with the disposed asset must be transferred to retained earnings, bypassing the income statement.

Thus, after the reformation of the balance sheet, the retained earnings account will have the same amount of losses or profits, regardless of which method of accounting for fixed assets was used by the organization.

In addition, any amounts of insurance payments or compensation received by the organization in connection with the disposal of an asset will affect the financial result of its disposal.

Self-test questions:

2. Future economic benefits.

3. Initial cost of fixed assets. Accounting for the acquisition of fixed assets.

4. Subsequent costs: capitalization and period expenses.

5. Subsequent accounting of fixed assets: accounting of historical cost, revaluation of fixed assets.

6. Depreciation of fixed assets: useful life and accrual methods, reflection in accounting.

7. Disposal of fixed assets: recognition and disclosure in accounting.

IFRS 16 determines the procedure for accounting for fixed assets for reliable reporting of information about the company’s investments in property. Our material will reveal the main applications IFRS 16.

Does IAS 16 “Fixed Assets” apply in our country?

Usage IFRS 16 “Property, plant and equipment"(together with other international standards) in Russia is permissible in 2 versions:

• without fail;
• voluntarily.

List of companies forced to apply IFRS (including IFRS “Fixed Assets”") due to legal requirements:

• credit and insurance organizations;
• legal entities whose securities are traded at organized auctions (included in the quotation list);
• companies whose charters stipulate the mandatory presentation and publication of financial statements in accordance with IFRS standards;
• companies that prepare consolidated statements according to GAAP standards (USA).

The second application option (voluntary) can be used by any company at their discretion. Since keeping records in accordance with international standards requires additional costs (paying for the services of specialists, parallel record keeping and/or reporting according to domestic accounting standards and IFRS, etc.), international standards are voluntarily applied only in necessary situations. An example of such a situation is the need to attract foreign investment, one of the conditions for receiving which is keeping records and reporting according to international standards.

IMPORTANT! IAS 16 “Fixed assets” was put into effect in our country by order of the Ministry of Finance of Russia dated December 28, 2015 No. 217n (Appendix No. 8) from 02/09/2016.

Key issues addressed by IFRS 16

IFRS 16 “Property, Plant and Equipment” addresses the following main aspects of accounting for fixed assets (PP):

• conditions for recognition of assets as fixed assets;
• their initial assessment;
• algorithm for determining depreciation charges;
• calculation of losses to be recognized from loss of value of fixed assets.

The standard outlines the following issues that cannot be resolved with its help:

• for assets held for sale: these issues are addressed by IFRS 5, which deals with non-current assets held for sale and discontinued operations;
• for biological agricultural assets: their accounting parameters are discussed in IFRS 41 “Agriculture”;
• for assets related to the exploration and evaluation of mineral resources (IFRS 6);
• on rights to use subsoil and non-renewable resources (oil, natural gas, etc.).

Provisions IFRS 16 must be taken into account in conjunction with other international standards. For example, recognition of leased assets as fixed assets must be carried out in accordance with IFRS 17 “Lease” (at the time of transfer of benefits and risks). However, all other nuances of accounting for such property are regulated IFRS 16.

Is there any similarity between the terms IFRS 16 and domestic PBU 6/01?

Of the terms deciphered in IFRS 16, several definitions can be noted that are identical to Russian ones (in external form and internal content). For example, such as depreciation (distribution of the cost of an asset over its useful life) or the useful life of an asset (this term will be discussed in a later section).

Another term used by both standards (domestic and international) related to asset accounting is the phrase “initial cost”.

This term is presented in the standards as follows:

• V IFRS 16 as a single definition (generalized form);
• in PBU 6/01 as several separate definitions (for OS purchased for a fee, received free of charge and in other cases).

The Russian definition of initial cost takes into account the specifics of domestic taxation and is deciphered as the sum of the actual costs of acquisition (construction, manufacturing) without VAT and other refundable taxes (for fixed assets purchased for a fee).

In the interpretation of IFRS 16, the term is presented in a condensed and more generalized form, while containing the concept of “fair value” (FV), which is not used in PBU 6/01 and is identical to the concept of “current market value” used in Russia.

IMPORTANT! IFRS 13 Fair Value Measurement FV refers to the price that would be receivable from the sale of an asset or the transfer of a liability in an orderly transaction between market participants at the measurement date.

According to IFRS 16, historical cost means:

• the amount paid or their equivalents;
• CC of other consideration transferred upon acquisition of the asset;
• the amount taken into account at the cost of an asset on initial recognition in accordance with the requirements of other IFRSs.

Thus, despite the 100% similarity in the used phrase “initial cost” for both standards, in fact their internal content is not completely identical.

For the nuances of domestic OS accounting and reporting, see the materials on our website:

• .

Peculiarities of recognition of fixed assets and its subsequent assessment in the interpretation of IFRS 16

An asset is recognized as fixed assets if 2 conditions are simultaneously met:

• the company is likely to receive economic benefits in the future;
• there is a reliable estimate of the original cost of this object.

The accounting for spare parts, as well as reserve and auxiliary equipment as fixed assets depends on whether they meet the recognition criteria provided for by IFRS 16. If the conditions for recognition of this property as fixed assets are not met, these assets are classified as inventories.

Subsequent assessment of the OS is allowed using one of the following models:

• at original cost;
• at a revalued value.

The first accounting model (“at historical cost”) is similar to that used in Russian accounting (PBU 6/01) and consists in the fact that after recognition as fixed assets, the asset is accounted for at historical cost, excluding accumulated amounts:

• depreciation;
• impairment losses.

According to the second model, the same above-mentioned components (depreciation and impairment losses) are subtracted from the cost of fixed assets. However, a significant difference between the second accounting model and the first is that it is necessary to deduct not from the initial cost of the fixed asset, but from its CC.

SS OS is the value of the asset on the date of revaluation, taking into account its real-time market valuation. When using this model, the OS must be revalued regularly.

IMPORTANT! The model for subsequent assessment of fixed assets used by the company must be fixed in the accounting policy.

Depreciation of fixed assets according to IFRS 16

IFRS 16 talks about 2 concepts related to depreciation:

• depreciable amount of asset (AVA);
• depreciation period (PA).

AVA is defined as the difference between two values: the fixed asset taken as the initial amount and its liquidation value.

PA represents the useful life (LPI) of an asset, defined as:

• the time period during which the company is expected to use the OS;
• or the volume of production in physical terms expected to be received from the use of fixed assets.

IMPORTANT! Salvage value (LR) according to IFRS 16 is the estimated amount that an entity would currently receive from disposal of an asset (after deducting the estimated disposal costs) provided that the asset's condition and service life were as expected at the end of its STI. .

A significant difference in the procedure for depreciation of fixed assets according to IFRS 16 in comparison with PBU 6/01 is the need for regular analysis of drugs and personal investment information at least once a year (at least at the end date). Previous estimated values ​​are compared with expected values. The resulting differences must be reflected in accounting as a change in accounting estimates (IFRS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”).

At the same time, not only the drugs and personal information, but also the depreciation method used by the company are subject to regular analysis and revision.

The depreciation method may be one of the following:

• linear;
• reducing balance;
• proportional to the volume of production.

The chosen method is fixed in the accounting policy and is subject to consistent application (from period to period), except in situations where the company's expectations regarding the characteristics of the consumption of future economic benefits change.

Results

The application of IFRS 16 regulates approaches to accounting for fixed assets according to international standards. The standard deciphers the criteria for classifying an asset as a fixed asset, algorithms for the initial and subsequent assessment of property, the procedure for revaluing its value and other important accounting aspects.

Depreciation

43 Each component of an item of property, plant and equipment whose cost is significant in relation to the total cost of the item must be depreciated separately.

44 An entity allocates the amount initially recognized for an item of property, plant and equipment among its significant components and depreciates each such component separately. For example, it may be appropriate to depreciate the fuselage and engines of an aircraft separately, regardless of whether it is owned or subject to a finance lease. Similarly, if an entity acquires an item of property, plant and equipment that is the subject of an operating lease in which the entity is the lessor, it may be appropriate to separately depreciate the amounts recorded in the item's cost that are attributable to the favorable and unfavorable terms of the lease relative to market conditions. conditions.

45 The useful life and depreciation method of one significant component of an item of property, plant and equipment may be exactly the same as the useful life and depreciation method of another significant component of the same item. Such components can be combined into groups when determining the amount of depreciation expense.

46 If an entity depreciates certain components of an item of property, plant and equipment separately, it also depreciates the remainder of that item separately. The remainder of the object consists of those components that are not individually significant. If the organization's expectations regarding the use of these components vary, approximation methods may be required to provide depreciation for the remainder of the asset to provide a true reflection of the consumption patterns and/or useful lives of its constituent components.

47 The organization has the right to charge depreciation separately for components of an object, the initial cost of which is not significant in relation to the original cost of the entire object.

48 The amount of depreciation expense for each period should be recognized in profit or loss unless it is included in the carrying amount of another asset.

49 The amount of depreciation expense for any period is generally recognized in profit or loss. However, sometimes the future economic benefits embodied in an asset are consumed in the production of other assets. In this case, the amount of depreciation charges is part of the original cost of the other asset and is included in its book value. For example, depreciation amounts for a production building and equipment are included in the materials processing costs of producing inventories (see IAS 2). Similarly, depreciation amounts for property, plant and equipment used in the development process may be included in the cost of an intangible asset recognized in accordance with IAS 38 Intangible Assets.

Depreciable amount and depreciation period

50 The depreciable amount of an asset is subject to systematic distribution over the useful life of the asset.

51 The residual value and useful life of an asset should be reviewed for possible revision at least as of each year-end and, if expectations differ from previous estimates, the corresponding change(s) should be accounted for as a change in accounting estimates in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

52 Depreciation is charged even if the fair value of the asset exceeds its book value, provided that the liquidation value of the asset does not exceed its book value. During repairs and routine maintenance of an asset, depreciation does not stop.

53 The depreciable amount of an asset is determined minus its salvage value. In practice, the salvage value of an asset is often negligible and is therefore immaterial when calculating the depreciable amount.

54 The residual value of an asset may increase to an amount equal to or greater than its carrying amount. If this occurs, then the amount of depreciation on that asset is zero unless and until its residual value subsequently falls below the carrying amount of that asset.

55 Depreciation of an asset begins when it becomes available for use, that is, when its location and condition allow it to be used in the manner intended by management. Depreciation of an asset ceases on the date the asset is classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with IFRS 5 or the date the asset is derecognized, whichever them comes earlier. Consequently, depreciation does not stop when an asset is idle or removed from service, unless the asset is fully depreciated. However, when using output-based depreciation methods, the depreciation charge may be zero during the time when there is no production.

56 The future economic benefits embodied in an asset are consumed by the entity primarily through its use. However, other factors, such as obsolescence, commercial obsolescence and physical wear and tear when an asset is idle, often reduce the economic benefits that could be obtained from the asset. Therefore, when determining the useful life of an asset, all of the following factors must be taken into account:

(a) the intended use of the asset; utilization is estimated based on the design capacity or physical productivity of the asset;

(b) expected physical depreciation, which depends on operational factors such as the number of shifts using the asset, the repair and routine maintenance plan, and the conditions under which the asset is stored and maintained during downtime;

(c) obsolescence or commercial obsolescence resulting from changes or improvements in the production process or from changes in market demand for the products or services produced by the asset;

(d) legal or similar restrictions on the use of the asset, such as the expiration of relevant leases.

57 The useful life of an asset is determined based on the expected usefulness of the asset to the organization. An organization's asset management policy may provide for the disposal of assets after a specified time or after a certain proportion of the future economic benefits embodied in the asset have been consumed. Thus, the useful life of the asset may be shorter than its economic life. The estimated useful life of an asset is made using professional judgment based on the organization's experience with similar assets.

58 Land and buildings are separable assets and are accounted for separately, even if acquired together. With some exceptions, such as quarries and landfill sites, land has an indefinite useful life and is therefore not depreciated. Buildings have a limited useful life and are thus depreciable assets. An increase in the value of the land on which the building is located does not affect the determination of the depreciable value of this building.

59 If the original cost of a piece of land includes the costs of dismantling, removing fixed assets and restoring the site's environment, then that portion of the cost of the land asset is depreciated over the period the benefits of those costs are realized. In some cases, the land itself may have a limited useful life, in which case it is depreciated using a method that reflects the benefits derived from it.

Depreciation method

60 The depreciation method used should reflect the entity's expected consumption patterns of the future economic benefits of the asset.

61 The depreciation method applied to an asset should be reviewed for possible revision at least as of each year end and, if there is a significant change in the expected consumption patterns of the future economic benefits flowing from the asset, the method should be changed to reflect the changed expectations. . Such a change should be accounted for as a change in accounting estimate in accordance with IAS 8.

62 Various depreciation methods can be used to distribute the depreciable amount of an asset over its useful life. These include the straight-line method, the declining balance method and the write-off method in proportion to the volume of production. The straight-line depreciation method calculates a constant amount of depreciation over the useful life of the asset, provided that the asset's salvage value does not change. As a result of applying the declining balance method, the amount of depreciation charged over the useful life of the asset is reduced. The volumetric write-down method is to charge depreciation based on expected use or expected level of productivity. The entity chooses the method that most accurately reflects the expected consumption patterns of the future economic benefits embodied in the asset. The method chosen is applied consistently from one reporting period to the next, unless expectations regarding the patterns of consumption of those future economic benefits change.

Impairment

63 To determine whether an item of property, plant and equipment is impaired, an entity applies IAS 36 Impairment of Assets. This standard clarifies how an entity analyzes the carrying amount of its assets, how it determines the recoverable amount of an asset, and when it recognizes or reverses an impairment loss.

64 [Deleted]

Impairment compensation

65 Compensation provided by third parties in connection with the impairment, loss or transfer of items of property, plant and equipment is included in profit or loss when the right to receive such compensation arises.

66 Impairment or loss of items of property, plant and equipment, related claims for compensation or payments of compensation by third parties, and any subsequent acquisition or construction of replacement assets constitute separate economic events and must be accounted for separately as follows:

(a) impairment of items of property, plant and equipment is recognized in accordance with IAS 36;

(b) derecognition of items of property, plant and equipment that are no longer in active use or are to be disposed of is determined in accordance with this Standard;

(c) compensation provided by third parties in connection with the impairment, loss or transfer of items of property, plant and equipment is included in the calculation of profit or loss when the right to receive it arises;

(d) the cost of items of property, plant and equipment restored, acquired or constructed for replacement purposes is determined in accordance with this Standard.

Derecognition

67 The carrying value of an item of property, plant and equipment is derecognised:

(a) upon disposal of the item;

(b) when no future economic benefits are expected from the use or disposal of the item.

68 A gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised (unless IAS 17 requires different requirements for sales and leasebacks). Such profits should not be classified as revenue.

68A However, if an entity, in the ordinary course of business, regularly sells items of property, plant and equipment that it has leased to others, the entity shall transfer such assets to inventory at their carrying amount when they cease to be leased and become assets held for sale. Proceeds from the sale of such assets should be recognized as revenue in accordance with IAS 18 Revenue. IFRS 5 does not apply when assets that are held for sale in the ordinary course of business of the entity are transferred to inventories.

69 Disposal of an item of property, plant and equipment can occur in various ways (for example, by sale, entering into a finance lease or by donation). When determining the date of disposal of an item, an entity uses the criteria provided in IAS 18 for recognizing revenue from the sale of goods. IAS 17 applies when the disposal occurs as a result of a sale and leaseback transaction.

70 If, in accordance with the recognition principle set out in paragraph 7, an organization recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing part of that item, then it ceases to recognize the carrying amount of the replaced part, regardless of whether that part was depreciated separately or not. If it is impracticable for an entity to determine the carrying amount of the part so replaced, the entity may use the replacement cost as an indication of the value of the replaced part at the time it was acquired or constructed.

71 The gain or loss arising on the derecognition of an item of property, plant and equipment is determined as the difference between the net proceeds on disposal, if any, and the carrying amount of the item.

72 The consideration to be received on disposal of an item of property, plant and equipment is initially recognized at fair value. If payment for a given item is deferred, the consideration received is initially recognized at the equivalent price, subject to immediate payment in cash. The difference between the nominal amount of the consideration and the equivalent price if paid immediately in cash is recognized as interest revenue in accordance with IAS 18, reflecting the effective yield of the receivable.

Information disclosure

73 The financial statements must disclose the following information for each class of property, plant and equipment:

impairment losses recognized in profit or loss in accordance with IAS 36;

impairment losses reversed in profit or loss in accordance with IAS 36;

depreciation amounts;

net exchange differences arising from the translation of financial statements from a functional currency into a reporting currency other than that currency, including the translation of a foreign subsidiary's figures into the reporting currency of the reporting entity;

other changes.

74 The financial statements must also disclose:

• (a) the presence and extent of restrictions on ownership of fixed assets, as well as fixed assets pledged as security for obligations;

(b) the amount of costs recognized as part of the carrying amount of an item of property, plant and equipment during its construction;

(c) the amount of contractual obligations for future transactions to acquire property, plant and equipment; And

(d) unless separately disclosed in the statement of comprehensive income, the amount of compensation provided by third parties for impairment, loss or transfer of items of property, plant and equipment that is included in profit or loss.

75 The choice of depreciation method and estimated useful life of assets are matters of judgment. Therefore, disclosure of adopted methods and estimated useful lives or depreciation rates provides users of financial statements with information that allows them to analyze management's policy choices and make comparisons with other entities. For similar reasons, it is necessary to disclose:

(a) the amount of depreciation charged during the period, whether recognized in profit or loss or as part of the cost of other assets; And

(b) the gross carrying amount of fully depreciated property, plant and equipment in use;

(c) the carrying amount of property, plant and equipment that is retired and not classified as held for sale in accordance with IFRS 5;

(d) the fair value of property, plant and equipment, if it differs materially from the carrying amount, when the cost model is used.

Transitional provisions

80 The requirements in paragraphs 24–26 in relation to the initial measurement of an item of property, plant and equipment acquired in an asset exchange transaction shall apply prospectively only to future transactions.

80A Document “Annual improvements to IFRS, period 2010–2012.” paragraph 35 is amended. An entity shall apply this amendment to all revaluations recognized in annual periods beginning on or after the date of initial application of the amendment and in the immediately preceding annual period. An entity may also have the right, but not the obligation, to provide adjusted comparative information for earlier periods presented. If an entity presents unadjusted information for earlier periods, it must clearly identify the information that has not been adjusted, indicate that it was presented on a different basis, and explain that basis.

80B

80C[This paragraph concerns amendments that have not yet entered into force and is therefore not included in this edition.]

Effective date

81 An entity shall apply this Standard for annual periods beginning on or after 1 January 2005. Early use is recommended. If an entity applies this Standard for a period beginning before 1 January 2005, it shall disclose that fact.

81A An entity shall apply the amendments set out in paragraph 3 for annual periods beginning on or after 1 January 2006. If an entity applies IFRS 6 to an earlier period, it shall apply those amendments to that earlier period.

81B IAS 1 Presentation of Financial Statements (as revised in 2007) amended the terminology used in IFRS. In addition, paragraphs 39, 40 and 73(e)(iv) have been amended. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) to an earlier period, those amendments shall be applied to that earlier period.

81C IFRS 3 Business Combinations (as revised 2008) amended paragraph 44. An entity shall apply that amendment for annual periods beginning on or after 1 July 2009. If an entity applies IFRS 3 (as revised 2008) to an earlier period, the amendment shall be applied to that earlier period.

81D Improvements to IFRSs, issued in May 2008, amended paragraphs 6 and 69 and added paragraph 68A. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. Early use is permitted. If an entity applies those amendments for an earlier period, it must disclose that fact and simultaneously apply the relevant amendments to IAS 7 Statement of Cash Flows.

81E Improvements to IFRSs, issued in May 2008, amended paragraph 5. An entity shall apply those amendments prospectively for annual periods beginning on or after 1 January 2009. Early application is permitted if the entity applies the amendments to paragraphs 8, 9, 22, 48, 53, 53A, 53B, 54, 57 and 85B of IAS 40 at the same time. If the entity applies those amendments for an earlier period, she must reveal this fact.

81F IFRS 13, issued in May 2011, amended the definition of fair value in paragraph 6, amended paragraphs 26, 35 and 77, and deleted paragraphs 32 and 33. An entity shall apply those amendments when it applies IFRS 13.

81G Annual Improvements to IFRSs 2009–2011, issued in May 2012, amended paragraph 8. An entity shall apply those amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. » for annual periods beginning on or after 1 January 2013. Early use is permitted. If an entity applies these amendments to an earlier period, it must disclose that fact.

81H Annual Improvements to IFRSs 2010–2012, issued in December 2013, amended paragraph 35 and added paragraph 80A. An entity shall apply this amendment for annual periods beginning on or after 1 July 2014. Early use is permitted. If an entity applies this amendment to an earlier period, it must disclose that fact.

81I–81K[These paragraphs relate to amendments that have not yet entered into force and are therefore not included in this edition.]

Termination of other documents

82 This Standard replaces IAS 16 Property, Plant and Equipment (as revised in 1998).

83 This standard supersedes the following clarifications:

Clarification of the SIC - 6 “Costs of modifying existing software”;

Explanation of the SIC - 14 “Fixed assets - compensation for impairment or loss of objects”;

Explanation of the RPC (SIC) - 23 “Fixed assets - costs for significant technical inspection or major repairs.”

IAS 16

International Financial Reporting Standard ( IAS) 16
Fixed assets

Target

1 The purpose of this standard is to determine the accounting treatment of property, plant and equipment so that, to enable users of financial statements to obtain information about an entity's investments in property, plant and equipment and changes in the composition of those investments. The main aspects of fixed asset accounting are asset recognition, determination of their book value, as well as related depreciation and amortization charges and impairment losses, subject to recognition.

Scope of application

2 This standard shall be applied to the accounting of property, plant and equipment, except in cases, when another standard specifies or permits a different accounting treatment.

3 This standard does not apply:

(a)fixed assets, classified as held for sale in accordance with(IFRS) 5 « Long-term assets , intended for sale , and discontinued operations » ;

(b)biological assets, related to agricultural activities(cm . );

(c)recognition and valuation of assets, related to exploration and assessment(cm . );

(d)rights to use subsoil and mineral reserves such as oil, natural gas and similar non-renewable resources.

Nevertheless , this standard applies to fixed assets, used to develop or operate assets, described in subparagraphs(b)-(d).

4 Other standards may require recognition of an item of property, plant and equipment using the, different from the approach, provided for by this standard. For example , requires an enterprise to use the transfer of risks and benefits as a criterion for recognizing a leased asset as part of fixed assets. However, in such cases, other aspects of the accounting procedure for fixed assets, including depreciation, determined by the requirements of this standard.

5 An enterprise that applies the model of accounting for investment property at actual costs in accordance with , must use the actual cost accounting model provided for in this standard.

Definitions

6 This standard uses the following terms with the meanings specified:

Book value — the amount at which an asset is recognized in the financial statements after deducting accumulated depreciation and accumulated impairment losses.

Cost price - the amount of cash and cash equivalents paid or the fair value of other consideration given to acquire the asset, at the time of its acquisition or during its construction, or, if applicable, the amount at which such asset was initially recognized in accordance with the specific requirements of other IFRSs ( IFRS), for example, IFRS 2 "Share-based payments" .

Depreciable value - the actual cost of an asset or another amount that replaces the actual cost, minus its residual value.

Depreciation of fixed assets — systematic distribution of the value of an asset over its useful life.

Enterprise-specific cost The present value of the cash flows that an entity expects to receive from the continued use of the asset and from its disposal at the end of its useful life or to pay when settling any liability.

fair value - the amount for which an asset could be exchanged between knowledgeable, independent parties willing to complete such a transaction.

Impairment loss — the amount by which the carrying amount of an asset exceeds its recoverable amount.

Fixed assets are tangible assets that:

(a) intended for use in the production or supply of goods and services, rental or administrative purposes;

(b) are expected to be used for more than one reporting period.

Recoverable cost — the greater of the asset's fair value less costs to sell or its value in use.

Residual value asset — the estimated amount that an entity would currently receive from disposal of an asset, after deducting the estimated costs of disposal, if the asset had already reached the end of its useful life and condition at the end of its useful life.

Useful life - This:

(a) the period of time over which the asset is expected to be available for use by the entity; or

(b) The number of units of output or similar units that the entity expects to receive from the use of the asset.

CONFESSION

7 The cost of an item of property, plant and equipment is recognized as an asset only if:

(a) it is probable that the entity will receive future economic benefits associated with the item;

(b) the cost of a given object can be reliably measured.

8 Spare parts and auxiliary equipment are generally recorded as inventory and are written off to profit or loss as they are used. However, large spare parts and standby equipment are classified as property, plant and equipment when the entity expects to use them over more than one reporting period. Similarly, if spare parts and service equipment can only be used in connection with the operation of an item of property, plant and equipment, they are accounted for as property, plant and equipment.

9 This Standard does not specify the unit of measurement that should be used for recognition, i.e. what exactly constitutes an item of property, plant and equipment. Thus, professional judgment is required when applying recognition criteria to the specific situation of an enterprise. In some cases, it may be appropriate to aggregate individual minor items, such as templates, tools, and dies, and apply criteria to their aggregate value.

10 An entity shall measure all of its costs related to property, plant and equipment using this recognition principle as such costs are incurred. Such costs include costs incurred initially in connection with the acquisition or construction of an item of property, plant and equipment, as well as costs subsequently incurred in connection with the addition, partial replacement or maintenance of that item.

Initial costs

11 The acquisition of fixed assets may be for security or environmental reasons. Although the acquisition of such items does not directly increase the future economic benefits from the use of a particular existing item of property, plant and equipment, it may be necessary for the enterprise to obtain future economic benefits from the use of other assets owned by it. Such items of property, plant and equipment may be recognized as assets because they provide the entity with future economic benefits from the use of the associated assets that exceed the benefits that would have been received if the assets had not been acquired. For example, a chemical industry enterprise can introduce new technologies for working with chemicals to ensure compliance with environmental requirements during the production and storage of hazardous chemicals; The associated modernization of production facilities is recognized as an asset because without it the enterprise cannot produce and sell chemical products. However, the resulting carrying amount of such asset and associated assets is subject to impairment testing in accordance with .

Subsequent costs

12 According to the accounting principle set out in , the enterprise does not recognize in the book value of an item of fixed assets the costs of day-to-day maintenance of the item. These costs are recognized in profit or loss as incurred. Routine maintenance costs consist primarily of labor and consumables, but may also include costs for minor component parts. The purpose of these costs is often described as "repairs and routine maintenance" of an item of property, plant and equipment.

13 Elements of some fixed assets may require regular replacement. For example, a furnace requires relining after a set number of hours of use, and aircraft interiors, such as seats or galleys, must be replaced several times over the life of the fuselage. The acquisition of fixed assets may also be carried out in order to extend the intervals between periodic replacements, such as the replacement of internal partitions in a building, or in order to make a one-time replacement. According to the accounting principle set out in paragraph 7, an enterprise must recognize in the carrying amount of an item of property, plant and equipment the costs of partial replacement of such an item at the time of occurrence, subject to compliance with the accounting principles. In this case, the carrying amount of the replaced parts is subject to derecognition in accordance with the provisions of this standard on write-off from the balance sheet. (cm. points).

14 A condition for continued operation of a fixed asset item (for example, an aircraft) may be regular large-scale technical inspections for defects, regardless of whether elements of the item are replaced. When each major technical inspection is performed, the associated costs are recognized in the carrying amount of the item of property, plant and equipment as a replacement, subject to the recognition criteria being met. Any amount of previous technical inspection costs remaining in the carrying amount (as opposed to spare parts) is subject to derecognition. This occurs regardless of whether or not the costs associated with the previous technical inspection were indicated in the acquisition or construction transaction. If necessary, the amount of a preliminary estimate of the costs for an upcoming similar technical inspection can serve as an indicator of the amount of technical inspection costs included in the book value of the object at the time of its acquisition or construction.

Assessment upon recognition

15 An item of fixed assets subject to recognition as an asset is measured at cost.

Cost elements

16 The cost of a fixed asset item includes:

(a) purchase price, including import duties and non-refundable purchase taxes, less trade discounts and refunds;

(b) any direct costs of delivering the asset to the required location and bringing it into condition necessary for operation in accordance with the intentions of the enterprise management;

(c) a preliminary estimate of the costs of dismantling and removing an item of property, plant and equipment and restoring natural resources on the site it occupies, for which the entity assumes an obligation either upon acquisition of the item or as a result of its use over a specified period for purposes other than the creation of inventories in during this period.

17 Examples of direct costs are:

( a)employee benefit costs (according to definition, contained in ), directly related to the construction or acquisition of fixed assets;

( b)site preparation costs;

( c)initial costs for delivery and loading and unloading operations;

( d)installation and assembly costs;

( e)the cost of verifying the proper functioning of the asset after deducting the net sales of items produced in the process of delivering the asset to its destination and bringing it into working condition (for example, samples obtained during testing of equipment); And

( f)payments for professional services rendered.

18 The company applies in relation to the costs of fulfilling obligations to dismantle, remove the object and restore resources on the site occupied by it, incurred over a certain period as a result of the use of the specified object to create inventory during this period. Liabilities for costs accounted for under or , are recognized and measured in accordance with .

19 Examples of costs, not related to the cost of fixed assets, are:

(a)costs of opening a new production complex;

(b)costs associated with the introduction of new products or services (including costs of advertising and promotional activities);

(c)costs associated with conducting business in a new location or with a new category of clients (including costs of personnel training); And

( d)administrative and other general overhead costs.

20 The inclusion of costs in the book value of an item of fixed assets ceases when such an item is delivered to the required location and brought into a condition that ensures its functioning in accordance with the intentions of the management of the enterprise. Therefore, costs incurred in using or moving an item are not included in the carrying amount of that item. For example, the following costs are not included in the carrying amount of an item of property, plant and equipment:

(a)costs incurred during a period when a facility capable of operating as intended by management is not yet operational or is not operating at full capacity;

(b)initial operating losses: for example, operating losses incurred in the process of generating demand for the products produced by the facility;

(c)costs for partial or complete relocation or reorganization of the enterprise's activities.

21 Some operations are carried out in connection with the construction or development of an item of property, plant and equipment, but are not necessary to bring the item to the required location and condition so that it can be operated in accordance with management's intentions. These side operations may occur before or during construction or development activities. For example, income may be generated by using a construction site as a parking lot prior to construction work. Because incidental operations are not necessary to bring the asset to its desired location and condition so that it can be operated in accordance with management's intentions, the income and related expenses from such operations are recognized as profit or loss and included in related items of income and consumption

22 The cost of an independently produced asset is determined on the basis of the same principles as the cost of an acquired asset. If an entity produces similar assets for sale in the ordinary course of business, the cost of that asset generally corresponds to the cost of producing the asset for sale (see ). Accordingly, when determining such cost, internal revenues are excluded. Similarly, the cost of an asset does not include excess costs of raw materials and other resources, labor and other costs incurred in creating the asset on its own. establishes criteria for recognizing interest as a component of the carrying amount of an independently produced item of property, plant and equipment.

Cost estimation

23 The cost of an item of fixed assets is the equivalent of the price subject to immediate payment in cash on the date of recording. When payment is deferred beyond normal credit terms, the difference between the immediate cash price equivalent and the total payment amount is recognized as interest over the installment period, unless such interest is capitalized in accordance with .

24 It is possible to acquire one or more fixed assets in exchange for a non-monetary asset or assets, or in exchange for a combination of monetary and non-monetary assets. The following considerations apply to the simple exchange of one non-monetary asset for another, but they also apply to all exchanges described in the previous sentence. The cost of an item of property, plant and equipment is measured at fair value unless: (a) the exchange transaction has no commercial substance or ( b ) Neither the fair value of the asset received nor the fair value of the asset given up can be measured reliably. The acquired item is measured in this way even if the entity cannot immediately write off the transferred asset. If the acquired item cannot be measured at fair value, its cost is measured based on the carrying amount of the asset transferred.

25 An entity determines whether an exchange transaction has commercial substance by taking into account the extent to which future cash flows are expected to change as a result of the transaction. An exchange operation has commercial content if:

(a)the structure (risk, timing and magnitude) of cash flows relating to the received asset differs from the structure of cash flows relating to the transferred asset; or

(b)as a result of the exchange, the enterprise-specific value of that part of its activity that is affected by this operation changes; And

(c) difference in (a) or (b ) is significant compared to the fair value of the assets exchanged.

For purposes of determining whether an exchange transaction has commercial substance, the enterprise-specific value of the portion of its activities affected by the exchange transaction must reflect the after-tax cash flows. The result of this analysis can be obvious even without the company carrying out detailed calculations.

26 The fair value of an asset for which no comparable market transactions exist is reliably measurable if (a) the variability within the extent that reasonable estimates of fair value are made varies within an insignificant amount for that asset, or ( b ) the likelihood of different estimates can be reasonably estimated within these limits and used in the calculation of fair value. If an entity is able to make a reliable determination of the fair value of an asset received or given up, the fair value of the asset given up is used to measure the cost of the asset received unless the fair value of the asset received is more readily apparent.

27 The cost of an item of fixed assets at the disposal of the lessee under a finance lease agreement is determined in accordance with .

28 The book value of an item of fixed assets can be reduced by the amount of government subsidies in accordance with .

Evaluation after recognition

29 An entity shall select as its accounting policy either the cost model in accordance with paragraph 30 or the revalued cost model in accordance with paragraph 31 and apply that policy to the entire class of property, plant and equipment.

Actual cost accounting model

30 Once recognized as an asset, an item of property, plant and equipment must be carried at cost less accumulated depreciation of property, plant and equipment and any accumulated impairment losses.

Revaluation accounting model

31 Once recognized as an asset, an item of property, plant and equipment whose fair value can be measured reliably is carried at a revalued amount, which is the fair value of that item at the date of revaluation less any subsequently accumulated depreciation and impairment losses. Revaluations should be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would have been determined using fair value at the end of the reporting period.

32 The fair value of land and buildings is generally determined based on market data through valuations, which are usually performed by professional valuers. The fair value of items of property, plant and equipment generally corresponds to their market value, determined by economic valuation.

33 In the absence of market data on fair value, due to the specific nature of an item of property, plant and equipment and the fact that such items, being part of an entity's property mix, are rarely sold separately, the entity may need to make an estimate of fair value using the income method or the income-based accounting method. replacement cost taking into account accumulated depreciation.

34 The frequency of revaluation depends on changes in the fair value of fixed assets subject to revaluation. If the fair value of a revalued asset differs materially from its carrying amount, an additional revaluation is required. Some items of property, plant and equipment are characterized by significant and random changes in fair value, which necessitate annual revaluation. Such frequent revaluations are not required for items of property, plant and equipment whose fair value is subject to only minor changes. The need for revaluation of such objects may arise only once every 3-5 years.

35 After the revaluation of an item of fixed assets, the depreciation of fixed assets accumulated as of the date of revaluation is taken into account in one of the following ways:

(a) It is recalculated in proportion to the change in the book value of the asset in gross valuation so that the book value of the asset after revaluation is equal to its revalued value. This method is often used when revaluing an asset to its residual replacement cost through indexing.

( b)or is deducted from the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. This method is often applied to buildings.

The amount of the adjustment arising when recalculating or writing off accumulated depreciation of fixed assets is part of the total increase or decrease in the carrying amount, which is subject to accounting in accordance with paragraphs 39 and 40.

36 If a single item of fixed assets is revalued, then all other assets belonging to the same class of fixed assets as this asset are also subject to revaluation.

37 Asset class - this is a group of fixed assets that are similar in terms of their nature and nature of use in the activities of the enterprise.Below are examples of individual classes of fixed assets:

(a) land;

(b)land plots and buildings;

(c)cars and equipment;

(d) watercraft;

(e) aircraft;

(f)motor vehicles;

(g)furniture and built-in elements of engineering equipment;

(h)office equipment.

38 Revaluations of items belonging to the same class of property, plant and equipment are carried out simultaneously to avoid selective revaluation of assets and the inclusion in the financial statements of amounts that represent a mixture of costs and values ​​at different dates. However, a particular asset class may be revalued using a rolling schedule, provided that the revaluation of that asset class is carried out within a short period of time and the results are updated.

39 If the carrying amount of an asset increases as a result of a revaluation, the amount of the increase must be recognized in other comprehensive income and accumulated in equity under the heading “revaluation surplus”. However, such an increase shall be recognized in profit or loss to the extent that it reverses the amount of the revaluation decrease on the same asset previously recognized in profit or loss.

40 If the carrying amount of an asset is decreased as a result of a revaluation, the amount of the decrease is included in profit or loss. However, the decrease must be recognized in other comprehensive income to the extent of the existing credit balance, if any, recorded in the revaluation surplus relating to the same asset. A decrease recognized in other comprehensive income reduces the amount accumulated in equity under the heading “revaluation surplus”.

41 When an asset is derecognised, any revaluation surplus included in equity in relation to an item of property, plant and equipment may be transferred directly to retained earnings. Thus, the increase in value from revaluation can be completely transferred to retained earnings when the operation of the asset ceases. However, part of the revaluation surplus may be transferred to retained earnings as the asset is used. In such a case, the amount of surplus carried forward is the difference between the amount of depreciation calculated on the basis of the revalued carrying amount of the asset and the amount of depreciation calculated on the basis of the original cost of the asset. The transfer of the increase in value from revaluation to retained earnings is carried out without involving profit or loss accounts.

42 The tax effect (if any) arising from the revaluation of property, plant and equipment is recognized and disclosed in accordance with .

Depreciation of fixed assets

43 Each component of an item of fixed assets, the cost of which is a significant amount relative to the total cost of the item, is depreciated separately.

44 An entity allocates the amount initially recorded as part of an item of property, plant and equipment among its significant components and depreciates each such component separately. For example, it may be appropriate to depreciate the fuselage and engines of an aircraft separately, regardless of whether it is owned or is the subject of a finance lease. Similarly, if an entity acquires an item of property, plant and equipment under an operating lease in which it is the lessor, it may be appropriate to charge depreciation separatelyfor amounts reflected in the cost of this property and attributable to lease terms, favorable or unfavorable compared to market conditions.

45 The useful life and depreciation method of one significant component of an item of property, plant and equipment may be exactly the same as the useful life and depreciation method of another significant component of the same item. Such components can be combined into groups when determining the amount of depreciation.

46 If an enterprise charges depreciation for certain components of a fixed asset item separately, then the rest of the item is depreciated separately. The remainder of the object consists of components that are not individually significant. If plans for the use of these components change, approximation methods may be required to depreciate the remainder of the asset to provide a reliable reflection of the consumption pattern and/or useful life of its components.

47 An enterprise has the right to charge depreciation separately for components of an object, the cost of which is not significant in relation to the cost of the entire object.

48 The amount of depreciation expense for each period should be recognized in profit or loss unless it is included in the carrying amount of another asset.

49 The amount of depreciation expense for any period is generally recognized in profit or loss. However, sometimes the future economic benefits embodied in an asset are transferred during the production process to other assets. In this case, the amount of depreciation is part of the cost of another asset and is included in its book value. For example, depreciation of production fixed assets is included in the cost of processing inventories (see. ). Similarly, depreciation of property, plant and equipment used for development purposes may be included in the cost of an intangible asset accounted for in accordance with "Intangible assets" .

Depreciable amount and depreciation period of fixed assets

50 The depreciable amount of an asset is subject to straight-line repayment over the useful life of the asset.

51 The residual value and useful life of an asset should be reviewed at least once at the end of each accounting year and, if expectations differ from previous accounting estimates, the changes should be accounted for as a change in accounting estimate in accordance with .

52 Depreciation on fixed assets is charged even if the fair value of the asset exceeds its book value, provided that the residual value of the asset does not exceed its book value. During repairs and routine maintenance of an asset, depreciation does not stop.

53 The depreciable amount of an asset is determined after deducting its residual value. In practice, the residual value of an asset is often insignificant and is therefore immaterial when calculating depreciable cost.

54 The residual value of an asset may increase to an amount equal to or greater than its carrying amount. If this occurs, the depreciation charge for that asset is zero unless its residual value subsequently falls below its carrying amount.

55 Depreciation of an asset begins when it becomes available for use, that is, when its location and condition allow it to be used in accordance with management's intentions. The asset ceases to be depreciated on the earlier of the date it is transferred to assets held for sale (or included in a disposal group that is classified as held for sale) in accordance with or the date the asset is derecognized. Accordingly, depreciation does not stop when the asset is idle or when the asset ceases to be in active use, unless the asset is fully depreciated. However, when using asset-based depreciation methods, the depreciation charge may be zero if the asset is not involved in the production process.

56 The future economic benefits embodied in the asset are consumed by the enterprise primarily through its use. However, other factors, such as obsolescence, commercial obsolescence and physical wear and tear when an asset is idle, often reduce the economic benefits that could be obtained from the asset. Accordingly, when determining the useful life of an asset, all of the following factors must be taken into account:

(a)nature of assets; intended use of the asset; utilization is estimated based on the design capacity or physical productivity of the asset;

(b)expected production and physical wear and tear, which depends on production factors such as the number of shifts using the asset, the repair and routine maintenance plan, and the conditions for storing and servicing the asset during downtime;

(c)obsolescence or commercial obsolescence resulting from changes or improvements in the production process or from changes in market demand for the products or services produced by the asset;

(d)legal or similar restrictions on the use of assets, such as the expiration of relevant leases.

57 The useful life of an asset is determined in terms of the asset's expected usefulness to the enterprise. An entity's asset management policy may provide for the disposal of assets after a specified time or after a certain proportion of the future economic benefits embodied in the asset have been consumed. Thus, the useful life of an asset may be shorter than its economic life. The estimated useful life of an asset is made using professional judgment based on the enterprise's experience with similar assets.

58 Land and buildings are separable assets and are accounted for separately, even if acquired together. With some exceptions, such as quarries and waste sites, land plots have an indefinite useful life and are therefore not subject to depreciation. Buildings have a limited useful life and are thus depreciable assets. An increase in the value of the land on which the building stands does not affect the determination of the depreciable amount for this building.

59 If the cost of a site includes the costs of dismantling, removing property, plant and equipment and restoring natural resources on the site, then that portion of the cost of the land asset is depreciated over the period in which the benefits of those costs are realized. In some cases, the land itself may have a limited useful life, in which case it is depreciated using a method that reflects the benefits derived from it.

Depreciation method

60 The depreciation method used should reflect the entity's expected pattern of consumption of the future economic benefits of the asset.

61 The depreciation method applied to an asset should be reviewed at least once at the end of each accounting year and, if there is a significant change in the expected consumption pattern of the future economic benefits embodied in the asset, the method should be changed to reflect that change in pattern. This change should be accounted for as a change in accounting estimate in accordance with .

62 Various depreciation methods can be used to pay off the depreciable amount of an asset over its useful life. These include the straight-line method, the declining balance method, and the units of production method. The straight-line depreciation method for fixed assets is to charge a constant amount of depreciation over the useful life of the asset, if the residual value of the asset does not change. As a result of applying the declining balance method, the amount of depreciation charged over the useful life is reduced. The units of production method calculates depreciation based on expected use or expected output. The enterprise chooses the method that most accurately reflects the expected consumption pattern of the future economic benefits embodied in the asset. The chosen method is applied consistently from one accounting period to the next, unless there is a change in the pattern of consumption of these future economic benefits.

Impairment

63 To determine whether an item of property, plant and equipment is impaired, an entity applies IFRS.(IAS) 36 "Asset Impairment" . This standard explains how an entity tests the carrying amount of its assets, how it determines the asset's recoverable amount, and when it recognizes or reverses an impairment loss.

64 [Deleted]

Impairment compensation

65 Compensation provided by third parties in connection with the impairment, loss or transfer of items of property, plant and equipment is included in profit or loss when such compensation becomes receivable.

66 The impairment or loss of items of property, plant and equipment, related claims for compensation or payment of compensation by third parties, and any subsequent acquisition or construction of replacement assets constitute separate economic events and must be accounted for separately as follows:

(a)recognition of impairment of fixed assets is carried out in accordance with IFRS(IAS) 36;

(b)write-off of fixed assets, the active operation of which has ceased, or which are subject to disposal, is determined in accordance with this standard;

(c)Compensation provided by third parties in connection with the impairment, loss or transfer of items of property, plant and equipment is included in the calculation of profit or loss when it becomes due;

(d)The cost of fixed assets restored, acquired or constructed for the purpose of replacement is determined in accordance with this standard.

Derecognition

67 The carrying value of an item of property, plant and equipment is derecognised:

(a) upon its disposal; or

(b) when no future economic benefits are expected from its use or disposal.

68 Income or expenses, , included in profit or loss when the item is written off(If does not contain other requirements regarding sale and leaseback). Profits should not be classified as revenue.

68 AHowever, if an entity regularly sells items of property, plant and equipment that it used for rental purposes to other parties in the ordinary course of business, the entity must transfer such assets to inventory at their carrying amount when they cease to be used for rental purposes and are held for sale. Income from the sale of such assets should be recognized as revenue in accordance with . does not apply when assets held for sale in the ordinary course of business are transferred to inventories.

69 Disposal of an item of fixed assets can occur in various ways.(for example, by selling, concluding a financial lease agreement or by donation). When determining the date of disposal of an object, the enterprise uses the criteria, installed to recognize revenue from the sale of goods. applies in those cases, when the disposal occurs as a result of a sale and leaseback.

70 If, as stated in paragraph 7 the principle of reflection in accounting, the enterprise includes in the book value of an item of fixed assets the costs of replacing part of the item, then it writes off the carrying amount of the replaced part, regardless of whether, whether this part was depreciated separately or not. If it is impracticable for an entity to determine the carrying amount of the replaced part, then it may use the cost of the replacement part as an indicator of the cost of the replaced part at the time, when it was purchased or built.

71 Income or expenses, arising in connection with the write-off of fixed assets, are defined as the difference between the net proceeds from disposal, If there are any, and the book value of the object.

72 Refund, receivable upon disposal of a fixed asset item, initially recognized at fair value. In case of deferred payment, related to an object of fixed assets, consideration received is initially recognized at the equivalent price, subject to immediate cash payment. The difference between the nominal value of the consideration and the equivalent price provided for immediate cash payment is recognized as interest income in accordance with , reflecting the effective yield of a given receivable.

Information disclosure

73 The financial statements shall disclose the following information for each class of property, plant and equipment:

(a) base, used to measure gross carrying amount- assessment;

(b) depreciation methods used;

(c) applicable useful lives or depreciation rates;

(d) gross book value- valuation and accumulated depreciation of fixed assets (together with accumulated impairment losses) at the beginning and end of the reporting period;

(e) reconciliation of the carrying amount at the beginning and end of the relevant period, reflecting:

(i) receipts;

(ii) assets, classified as held for sale or included in a disposal group, classified as held for sale in accordance with , and other disposals;

(iii) acquisition due to business combination;

(iv) increase or decrease in value, arising as a result of revaluation according to paragraphs 31, 39 and 40 and impairment losses, recognized or restored to other comprehensive income in accordance with (viii) net exchange rate differences, arising when financial statements are translated from a functional currency into a presentation currency other than that, including when recalculating the statements of a foreign subsidiary into the presentation currency of the reporting enterprise;

(ix) other changes.

74 Financial statements should also disclose:

(a) the presence and magnitude of restrictions on property rights to fixed assets, as well as fixed assets, pledged as security for the fulfillment of obligations;

(b) the amount of costs, included in the book value of fixed assets during its construction;

(c) the amount of contractual obligations for the acquisition of fixed assets;

(d) amount of compensation, provided by third parties in connection with impairment, loss or transfer of fixed assets and included in profit or loss, unless such amount is separately disclosed in the statement of comprehensive income.

75 The choice of depreciation method and estimated useful life of assets is based on professional judgment. Respectively , Disclosure of adopted methods and estimated useful lives or depreciation rates provides information to users of financial statements, allowing them to analyze the policies chosen by management and make comparisons with other enterprises. For similar reasons, it is necessary to disclose:

(a) depreciation of fixed assets during the period, regardless of whether, whether it is recognized in profit or loss or as part of the cost of other assets;

(b) accumulated depreciation of fixed assets at the end of the period.

76 In accordance with An entity discloses the nature and consequences of a change in accounting estimate, which either has an impact on the current period, or, as expected, will have an impact on subsequent periods. For property, plant and equipment, such disclosure may be required due to changes in estimates. related to:

(a)residual value;

(b)estimated estimated dismantling costs, removal or restoration of fixed assets;

(c)useful life;

(d)depreciation methods.

77 If fixed assets are stated at revalued amounts, the following information is subject to disclosure:

(a) date, for which the revaluation was carried out;

(b) participation of an independent appraiser;

(c) methods and significant assumptions, used when making estimates of the fair value of objects;

(d) degree, in which the fair value of the items was determined directly from current prices in an active market or recent market transactions between arm's length parties, or was derived using other valuation techniques;

(e) for each revalued class of fixed assets: book value, which would be recognized, if the assets were not accounted for using the cost model;

(f) increase in value from revaluation indicating the change for the reporting period and restrictions on the distribution of the specified amount between shareholders.

78 In addition to the information, specified in paragraphs 73(e)(iv)-(vi), in accordance with the company discloses information about fixed assets, subject to impairment.

79 Users of financial statements may also find information about:

(a) book value of temporarily idle fixed assets;

(b) gross book value- assessment of fully depreciated fixed assets in operation;

(c) book value of fixed assets, which have ceased to be in active use and which are not classified as held for sale in accordance with ;

( d ) in case of using the actual cost accounting model: fair value of fixed assets, if it differs significantly from the carrying amount.

Respectively, businesses are advised to disclose these amounts.

Conditions of the transition period

80 Points Requirements 24-26 in relation to the initial valuation of an item of property, plant and equipment, acquired in an asset exchange transaction, should be applied prospectively, only for future operations.

Effective date

81 An entity shall apply this Standard for annual periods., starting 1 January 2005 G. or after this date. Early use is encouraged.If an entity applies this standard for a period, starting before 1 January 2005 G., it should reveal this fact.

81 AAn entity shall apply the amendments set out in paragraph 3 for annual periods, starting 1 January 2006 G. or after this date. If the company applies IFRS ( IFRS ) 6 in relation to an earlier period, then it shall apply the said amendments in respect of such earlier period.

81 B IAS 1"Presentation of Financial Statements" (as amended in 2007) amended the termology, we usewowin International Financial Reporting Standards (IFRS). In addition, he amended paragraphs 39, 40 and 73( e )( iv ). An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (as amended 2007) to an earlier period, those amendments shall be applied to that earlier period.

81 C IFRS ( IFRS ) 3 (as amended in 2008) amended paragraph 44. An entity shall apply that amendment for annual periods beginning on or after 1 July 2009. If an entity applies IFRS ( IFRS ) 3 (as amended 2008) in respect of an earlier period, then the said amendments shall apply in respect of such earlier period.

81 D In points6 and 69 were amended by publication"Improvements to IFRS ( IFRS)», released in May 2008 and clause 68A was added. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. Early use is permitted. If an entity applies those amendments for an earlier period, it must disclose that fact and simultaneously apply the relevant amendments to IFRSs ( IAS ) 7 “Cash Flow Statement.”

81 EParagraph 5 has been amended topublication"Improvements to IFRS ( IFRS)», released in May 2008. An entity shall apply the amendment prospectively for annual periods beginning on or after 1 January 2009. Early application is permitted if the enterprise simultaneously applies the amendments to paragraphs8, 9, 22, 48, 53, 53 A, 53 B, 54, 57 and 85BIFRS (IAS) 40. If an entity applies that amendment to an earlier period, it must disclose that fact.

Terminationother documents

82 This standard replaces IFRS ( IAS ) 16 "Fixed assets" (as amended 1998 G.).

83 This Standard supersedes the following clarifications:

( a ) RCC ( SIC ) 6 “Costs for modifying existing software” ;

( b ) RCC ( SIC ) 14 « Fixed assets — compensation for depreciation or loss of objects » ; And

( c ) RCC ( SIC ) 23 « Fixed assets — costs for significant technical inspection or major repairs » .

Fhe's DIASB