Non-current assets must be covered. Current and non-current assets: how they affect business. Accounting for non-current assets at an enterprise

Non-current assets of the enterprise- this is a description of its property component, which is included in the balance sheet, where its full value at a certain moment is described in monetary terms.

Assets of this type include only those property that has a price of more than fifteen minimum incomes of the population, not subject to taxation, and that has been in use for one year or more.

Any organization in order to continue its own activities is obliged to use existing assets in the field of commerce. The basis of an organization's balance sheet is built on the use of assets and liabilities.

The management of various enterprises understands perfectly well that the amount of assets should always be equal to the amount of liabilities. It is the assets that contain the company’s non-current and current assets, which have a large number of groups and subsections.

Simply put, the non-current assets of an organization are the value of its property for a specific period of time. Such property must generate profit for more than a year or quarter, provided that the period for selling the property exceeds the deadline by more than a year.

Also, current assets can generate income for an enterprise - this is property that supplies the enterprise with profit one or more times during the year. Consumed materials that are used for the sale of non-current assets must be partially transferred to final products during the entire period of their operation.

Composition of non-current assets

Based on the basic documentation relating to the accounting of the organization, non-current assets consist of:

By area of activity, non-current assets are divided into:

operating rooms. This type of asset is aimed at implementation in the field of production and commerce of the organization;
investment. Such assets are long-term in nature and were created during the implementation of the organization’s investments within itself or in other enterprises;
non-productive. These assets help satisfy the needs of the social direction of the enterprise’s employees.

Depending on the direction of the organization’s production activities, non-current assets can be either own or borrowed.

Own assets- this is the property that is owned by the organization and is reflected in the balance sheet.
Borrowed assets is the property that is sold by the organization temporarily and is supported by a concluded regulatory agreement.

By type of supply for the collateral part in lending and insurance, non-current assets are divided into movable and immovable assets. Movable assets are assets that can be withdrawn from an organization in order to pay a loan obligation as collateral, if any. Real estate assets cannot be taken from the organization as collateral.

Non-current assets are constantly in continuous movement, which is cyclical in nature. This process involves:

the accumulated amount of depreciation that is invested in these assets;
initial price of non-current assets;
the depreciation price of non-current assets that are transferred to manufactured goods.

As mentioned above, materials that are used several times over more than one year, formed in an intangible form, are called intangible assets.

Intangible assets

In order for an asset to be called an intangible asset, it must meet certain requirements:

it must be aimed at generating profit in the long term;
he must take part in the production of goods and services of the organization;
it must provide economic benefit throughout its life;
it should not be in close contact with other assets of the organization;
the required period for the sale of the asset must be at least one year;
the organization does not make a decision on the sale of goods for one year;
the real price of the product can be easily identified;
the product has no material component.

Examples of such assets include programs in the field of computerization, literary works, library collections, innovative developments, an individual product mark, a brand (a special sign for “recognizing” a product among competing products), and the business image of an organization.

Intangible assets cannot include monetary costs that were incurred in the process of forming legal representation, as well as the individual qualitative characteristics of the organization’s employees, qualifications and incentives for work.

An organization's intangible assets are divided into those that can be identified and those that cannot. The first includes the organization’s intellectual property and rights to it, which can increase profits over a long period of time. The second assets include those properties that are acquired over time and begin to generate income also gradually (for example, the reputation of an organization).

Fixed assets

Fixed assets of an organization are the property of the enterprise, used for more than one year, which will generate income over time.

In order for an asset to be called a fixed asset, it must meet certain conditions:

active agents are used to manufacture products;
the period of use of the product is more than one year;
this product is not subject to subsequent sale;
The product is aimed at generating profit for the long term.

Valuation of non-current assets

The registration and process of evaluating the organization's non-current assets occurs through methods based on cost and natural values. Cost values consist of the initial price, the remainder, manipulation to restore the price and the final price.

In the process of introducing a product to the market, evaluation occurs according to starting price– the amount of actual costs for the purchase, production, logistics and installation of the product. The initial price of the product is subject to change, subject to its subsequent improvement and restructuring.
Remainder– this is the difference from the initial price and the resulting wear. This value indicates the price of the product to be reflected in the organization’s balance sheet.
Manipulations to restore prices is the process of determining the initial price of a product after its evaluation. The price of a product on the market refers to the price for which the consumer agrees to purchase the product.
Final price- this is a price category that is regulated by a special commission to determine the likelihood of insolvency of the organization or at the insistence of the current management team.

The accepted unit value for calculating the organization's fixed assets was the inventory item.

Fixed assets are of an operating or non-operating nature, being at the development stage, in reserve reservations, as well as at the elimination stage.

In addition, these funds have the form of production assets that are involved in the creation of a product or service, and non-productive assets that are not involved in the production of the product, but are the main suppliers for the sale of the product.

They can also be owned, leased, active (the most movable component of assets) and passive (those that have no material value).

Investments

Non-current assets cannot exist without investment. These are expenses that are aimed at reviving and replenishing fixed assets, their purchase and the sales process.

This may include:

expenses spent on construction and restoration of existing buildings;
acquisition and production of goods and services;
expenses for planting and caring for perennial trees and shrubs;
expenses aimed at creating animal pastures and increasing the size of the herd.

Sales costs in the field of buildings can be divided into two parts: contracting and economic. Contract expenses are formed by involving third-party organizations in the work, and business expenses are when the work process is carried out in-house.

Advantages

The structure of non-current assets has certain advantages in the implementation of the organization’s activities:

Flaws

In addition to the positive aspects of non-current assets, they also have negative qualities:

such assets are highly susceptible to moral depreciation, because Even with little non-use, they can decrease in value;
the process of managing these assets is definitely complex because their system is almost impossible to adjust and change. Therefore, even with the slightest change in the market situation, the period for selling goods decreases;
such assets are not used as means of payment.

To operate effectively and improve the quality of production, an organization needs to constantly adjust and improve knowledge in the field of using non-current assets. The management of enterprises must constantly look for new ways to implement them.

Non-current assets have a long period of validity, which have a multi-tasking nature for use. Such manipulations are reflected in the balance sheet according to the established regulations and rules, which are described in Order No. 94N, as well as in the regulatory legal acts of accounting in the organization.

There are three types of lies: bragging, lying and reporting.
Jozef Bulatowicz, Polish writer

Accounting is not the triumph of mathematics over reason,
Accounting is the triumph of reason over mathematics.
NN

For the uninitiated person, financial statements are a set of meaningless numbers. The peculiarities of accounting easily mislead investors who take numbers literally without thinking about where they come from. You can understand the state of the company by analyzing all the main reporting documents, not just for one year, but over time. Only in this case the processes occurring in the company are visible.

Last time we sorted it out. It's time to get to know them better. And today we will look at two main types of assets - non-current and current.

Current and non-current assets

I heard the most understandable explanation of the difference between current assets and non-current assets back in university:

Current assets are spent or consumed in the production process, while non-current assets are used.

For example, when you drink your morning coffee, you consume the drink itself, but you use the mug and spoon. This means that for you coffee is a current asset, and a mug with a spoon is a non-current asset. And if you use disposable paper cups, then they also become current assets.

Problem: my sister is a wedding photographer. She takes photographs of wedding guests, processes the photos on a computer, prints them and designs beautiful wedding photo albums. What are its current and non-current assets?

In actual practice, in order not to complicate accounting, current assets also include things that are used and not spent in the production process, but are very cheap.

Stationery, tools, circles for employees - all these little things do not fall into the company’s non-current assets. Moreover, according to international standards, the company has the right to determine the minimum value of assets, and all costs below this value will fall into the expenses column rather than into the asset column.

In international practice, current assets are called current assets, and non-current assets are called long-term assets.

Current assets The first current asset is money in any form (Cash & Equivalents):

cash, bank account balances. It is logical that reusing them in production is problematic. Then there are short-term financial investments (Short Term Investments)

— they mean short-term loans for a period of less than 12 months. This asset has two features. Firstly, the company does not have this money, although it is listed in its assets. Secondly, the company may not receive this money at all or receive it late.

These features leave their mark, for example, on financial planning, as well as on the discrepancy between the profit and cash flow of the company. The occurrence of accounts receivable is already considered income, because net assets have increased, but at the same time the company may experience difficulties in paying its bills, since the company does not yet have money. We will discuss accounts receivable in a separate article.

Inventory - everything is simple here. What is lying around in warehouses is classified as inventory. Raw materials, semi-finished products, unfinished products, finished goods, etc. The standards do not require disclosure of reserves by type; a company can do this voluntarily. For manufacturing companies and retailers, inventory analysis is one of the most important analytical tools, which, unfortunately, in most cases is not available to private investors.

Prepaid Expenses - prepaid goods and services.

For example, in December 2014, a company buys insurance for its cars for the next year. According to accounting rules, this amount cannot be attributed to expenses, because the expense “comes” only next year, so the insurance amount will appear in the balance sheet in this section, and already in 2015 there will be a “virtual” expense - writing off this asset as an expense.

Fixed assets Non-current assets can be divided into three large groups - intangible assets, tangible assets and financial assets.

Intangible assets (Intangibles) are the intellectual property of a company. Patents, copyrights, franchises, trademarks, rights of use, etc.

An intangible asset such as business reputation or “Goodwill” stands apart.

Depreciation is charged on fixed assets and intangible assets, that is, every year the value of the asset decreases, and the amount of this decrease becomes an expense - the cost of goods.

Until the moment when the book value of the asset becomes zero. The presence of depreciation and different methods of calculating it lead to the fact that it is pointless to analyze the balance sheet in isolation from other accounting documents. Therefore, we will consider this issue separately. Financial investments (Long Term Investments) are investments in the classical sense of the word.

The company invests money for a period of more than a year and expects investment income. This includes both debt investments (a company lends money, buys bills or bonds) and direct investments (purchase of shares in a company, investments in shares). There is a difference when accounting for accounts receivable in Russian and international reporting.

In the balance sheet according to Russian standards, all receivables are classified as current assets and are already divided into short-term and long-term. In IFRS balance sheets, only short-term receivables (with a maturity of less than a year) are included in current assets, and long-term receivables are included in non-current financial assets. Keep this in mind if you find a big discrepancy in the numbers on one company's balance sheet.Current assets are

those enterprise resources without which the activities of any company are virtually impossible. What are current assets, how to calculate and group them in accounting and management accounting, find out in the material.

What refers to the current assets of an enterprise - definition

Enterprise assets are an important indicator that reflects the level of development of the company. There are 2 groups of assets: current and non-current.
Non-current assets are those company resources whose service life exceeds 1 year: fixed assets, long-term financial liabilities, construction in progress, etc.

Current assets (OA) are company assets that are consumed during one production cycle or written off during the year.

What are the sources of formation of the organization’s current assets?

The sources of OA formation can be:
The company's own or equivalent resources.
Involved funds.

Borrowed funds.

At the same time, spending the company’s own resources to increase OA has a minimal level of risk compared to attracting borrowed funds.

What is included in other current assets on the balance sheet

According to the norms of PBU 4/99, OA are displayed in section II of the balance sheet.

The balance sheet should also display information about non-material assets that are not included in other articles of Section II. TO other things current assets include:

The cost of completed stages of unfinished work, recorded in the account. 46.
VAT on advances, allocated separately to the account. 62 or 76.
Shortages or damaged valuables for which a decision on write-off has not yet been made.
VAT and excise taxes subject to reimbursement after the reporting period.
VAT on goods shipped, revenue for which will be recognized in the next year.

This information is displayed in line 1260 “Other current assets”.

What can be classified as low-liquid current assets?

Liquidity is an indicator of the speed at which an asset is converted into money. A very important aspect in making a company profit is the competent management and control of OA. To carry out the control functions of the company and determine risks, it is necessary to develop a gradation that will allow determining the possible liquidity of the asset in the event of a crisis situation. In the economic literature, a variant of risk gradation by degree has been proposed.

Low-liquid assets are considered to be those assets whose conversion into money takes more than a year. For example, a receivable with an expected return period of more than 12 months or goods stored in warehouses. That is, all OA that are considered high risk are considered the least liquid.

Formula for calculating the liquidity ratio of current assets

To calculate the rate of asset turnover and quickly track the solvency of the company, financiers calculate the current liquidity ratio of the company. This indicator shows whether the company can pay off current obligations at the expense of OA. Accordingly, the higher it is, the better for the company. Formula for calculation:

Ktl = OA/Co,

Ktl - current liquidity ratio,

OA - current assets,

Co - short-term liabilities.

The data for calculating the coefficient is taken from the balance sheet.

Results

Effective management of current assets is the key to the smooth operation of the company. Each company determines the volume of OA required for work independently based on its own needs, the rate of resource consumption and the size of the business. At the same time, their lack can lead to a stop in production or the inability to pay off current obligations. Excess indicates inactivity of assets and the inability to quickly convert them into cash, i.e. low liquidity.

Current assets– these are assets that serve or are repaid within 12 months, or during the normal operating cycle of the organization (if it exceeds 1 year). Many current assets are used simultaneously when they are released into production (for example, raw materials). Current assets are one of two groups of assets of an organization (the second is non-current assets).

Composition of current assets

The following current assets are distinguished:

VAT on purchased assets;
accounts receivable;
financial investments (except for cash equivalents);
cash and cash equivalents;
other assets that meet the criteria of current assets.

Current assets, in principle, have a higher degree of liquidity than non-current assets. And money, as part of current assets, has absolute liquidity.

Analysis of current assets

A sufficient amount of current assets is necessary for the smooth operation of the enterprise, be it materials used in the production process, or funds for settlements with suppliers. Therefore, analysis of asset liquidity occupies a central place in the financial analysis of enterprises.

A high share of current assets is typical for material-intensive industries and trade organizations. The higher the share of current assets (and, accordingly, the lower the share of non-current assets), the more the organization can attract short-term financing (short-term loans and borrowings, deferred payments to suppliers, etc.) without compromising its financial stability.

Fixed assets– these are assets whose useful life (repayment) is more than one year. The total amount of assets of the enterprise consists of non-current and current assets.

Composition of non-current assets

Non-current assets include:

intangible assets;

research and development results;

fixed assets;

profitable investments in material assets;

financial investments, the return of which is expected no earlier than in a year;

Deferred tax assets;

other assets that have characteristics of non-current assets.

By the ratio of the share of current and non-current assets one can judge nature of production. Thus, capital-intensive enterprises (for example, telecommunications) are characterized by a large share of non-current assets, and material-intensive (or commodity-intensive, such as trade) are characterized by a small share.

Analysis of non-current assets

Non-current assets require long-term investments, so the sources of their acquisition should be mainly the organization’s own capital, and partly long-term borrowed funds. Therefore, the more capital-intensive production, the greater should be the share of equity capital in the sources of financing the enterprise’s activities.

Non-current assets have less liquidity than current assets, that is, they are more difficult to sell by converting them into cash. In general, liquidity, as one of the indicators of financial stability, depends on the structure of the enterprise’s assets and the sources from which their purchase is financed.

§ 4. Depreciation and amortization of fixed assets

The main production assets wear out during their operation. There are two types of wear and tear - physical and moral.

Under physical wear and tear understand the gradual loss of fixed assets of their original use value, which occurs not only during their operation, but also during their inactivity (destruction from external influences, atmospheric influences, corrosion). The physical wear and tear of fixed assets depends on the quality of fixed assets and their technical improvement; features of the technological process; the time of their action; degree of protection of fixed assets from external conditions; the quality of care for fixed assets and their maintenance, from the qualifications of workers and their attitude towards fixed assets.

Physical deterioration occurs unevenly even among identical elements of fixed assets. A distinction is made between complete and partial depreciation of fixed assets. At completely worn out existing assets are liquidated and replaced with new ones (capital construction or ongoing replacement of worn-out fixed assets). Partial wear reimbursed through repairs.

Essence obsolescence consists in the fact that the means of labor depreciate, lose value until they are physically worn out, before the end of their physical service life.

Obsolescence comes in two forms.

The first form of obsolescence is This is a reduction in the cost of machines and equipment of the same design that were produced before, due to the reduction in the cost of their reproduction in modern conditions.

Second form of obsolescence- this is a reduction in the cost of machinery and equipment that is still physically usable due to the emergence of new, technically more advanced and productive ones, which displace the old ones.

The main source of covering costs associated with the renewal of fixed assets, in the context of the transition to market relations, self-financing of enterprises are own funds of enterprises. They accumulate over the entire service life of fixed assets in the form of depreciation charges.

Depreciation - This is monetary compensation for the depreciation of fixed assets by including part of their value in the costs of production. Consequently, depreciation is the monetary expression of physical and moral wear and tear of fixed assets. Depreciation is carried out in order to completely replace fixed assets when they are disposed of. The amount of depreciation depends on the cost of fixed assets, the time of their operation, and the costs of modernization.

The ratio of the annual amount of depreciation to the cost of fixed assets, expressed as a percentage, is called depreciation rate. The depreciation rate, calculated as a percentage, shows what share of its book value is transferred annually by the means of labor to the products they create. According to established standards, depreciation charges are included in the cost of finished products.

Currently being developed uneven depreciation, in which most of the cost of equipment is included in production costs in the first years of operation. For example, in the first year - 50%, second - 30%, third - 20%. This allows the enterprise, in conditions of inflation, to quickly recoup the costs made and use them for further updating of the equipment fleet.

What is the difference between non-current and current assets? Any accountant can answer this question from the height of his professionalism, but we will try to look at the question through the eyes of a simple layman.

To work even in the smallest production, you need to know what the profit is made up of and what the costs are, especially if you are a financially responsible person.

People commit many administrative, disciplinary and even criminal acts out of ignorance of the internal “kitchen” of production (and those who do because of knowledge do so intentionally, but that’s not the point).

Be that as it may, understanding assets is useful for any person, not necessarily an accountant and not necessarily a production employee.

Prepaid Expenses - prepaid goods and services.

Non-current assets of an enterprise are fixed assets- everything that is not directly involved in the production process, but without which its progress is impossible. For example, a building in which many production workshops are located. Hands do not grow out of the walls and begin to help the workers, but if there were no building, there would be no production either!

It happens, of course, that some material is produced outdoors, but this is the exception rather than the rule. In all other cases, real estate is the basis of production, its foundation.

Buildings and constructions- This is not the active part of non-current assets. Simply put, they are quite stable and are little subject to reorganization. The maximum that is provided for them is planned repairs, and reconstruction, if production plans require it.

Unlike buildings and structures, non-current assets such as machines, units, equipment, technical accessories and engineering devices, are an active share of non-current assets. The equipment fleet of the growing enterprise is constantly updated, more and more powerful units are supplied from abroad, and old ones are repaired, reconstructed and modernized whenever possible.

It is easier to imagine how these non-current assets take part in the production process, but still, they remain in their original form, without sacrificing their screws and tongues for the sake of the final result. However, both buildings and units experience physical wear and tear. This is precisely the strength they put into the product.

Non-current assets are constantly subject to revaluation, since their value decreases due to wear and tear, and the cost of products, accordingly, increases (everything comes from somewhere and goes somewhere: the “law of conservation of value”).

This phenomenon is called depreciation of fixed assets and, as you probably already guessed, it can only apply to non-current assets.

So once again, what applies to non-current assets:

Buildings, structures, production facilities, workshops, warehouses, etc.;
Machines, units, power plants, machine tools, transport, equipment fleet as a whole;
Also non-current assets are long-term, reflected in the enterprise’s credit account;
This also includes unfinished buildings and structures;
Animals and perennial plantings;
As well as other (intangible) assets that represent intellectual value.
To put it simply, this is knowledge and skills, and in business language this can include various patents and know-how (new items in engineering and technology, the implementation and sale of which the company has the exclusive right to).

This is all that serves a person for several years, right up to “writing off”.

Since non-current assets “live” a long life, it is difficult to call them liquid. In other words , fixed asset turnover, that is, turning them into money, if necessary, leaves much to be desired.

Some assets “lie” on the company’s balance sheet as a dead weight, and sometimes no one is even in a hurry to write them off. Due to such costs caused by the very essence of non-current assets, the company’s balance sheet is maintained in Russian rubles.

If there are no such problems: the equipment fleet has been updated, the newly built buildings sparkle with the brilliance of newness, and there is nothing “lying around” in the warehouses, then most likely the enterprise operates according to standards close to European ones, and it is in its interests that the liquidity of all its assets was high. Then reporting can also be done in currency: depending on which country the company has the best relations with, it can be the euro or the dollar. All you need to do is monitor exchange rates and place the greatest emphasis on the liquidity of non-current assets.

In international practice, current assets are called current assets, and non-current assets are called long-term assets.

Their name speaks for itself: they are completely “turned around” in one (maximum two) production cycle.

The simplest example of current assets is this is all the materials, going to the assembly line: their life is short. Production, supply, (storage), processing. Current assets are not involved in any other production cycle. Perhaps they will be used for fertilizer or some other process not related to production.

The volume of current assets on the company's balance sheet is, one might think, impressive. To ensure that the conveyors operate without stopping and the work process is not interrupted, there is always a supply of materials in the warehouses. However, there are also current assets that serve the production process for at least a year.

What are current assets:

materials are the main current asset;
Of course, cash is the most liquid commodity;
funds in accounts receivable (what third-party companies and organizations owe to this);
goods already produced and stored in warehouses;
goods already produced and delivered to the customer, but not yet paid for (when he pays for them, it will be in cash);
Services already provided but not yet paid for.

Non-current assets are shown in the 1st section of the balance sheet, and current assets in the 2nd section of the balance sheet; together they constitute the Balance Sheet Asset.

Current assets are also presented in a number of accounting accounts. This is a very structured system that makes it convenient to track the movement of tangible and intangible assets.