To carry out production and economic activities, enterprises must have fixed and working capital, which differ in their functions in the production process and the nature of participation in the formation of the value of goods. The processes of their consumption and renewal are also different.
Fixed capital – buildings, structures, equipment – serve for a number of periods of production, retaining its natural form. Working capital is used entirely during one production cycle, without retaining its independent consumer form and for each new production cycle they must be replaced by new ones.
In the conditions of the national economy, fixed and working capital act in the form of production assets, which, depending on the nature of participation in the production process and the transfer of value to finished products, are divided into fixed and working capital.
Fixed assets (fixed assets) for their intended purpose are divided into those used in entrepreneurial activities (production) and those not used in entrepreneurial activities (non-production). Fixed assets used in entrepreneurial activity (fixed production assets) include means of labor that, while maintaining their natural form, repeatedly participate in the production process and gradually, as they wear out, transfer their value to the cost of finished products (works, services) produced with their participation. The funds not used in entrepreneurial activities include non-production facilities that serve the cultural and domestic sphere of the company’s employees and are listed on its balance sheet. The composition of non-production funds includes polyclinics, dispensaries, health camps, children’s preschool institutions, etc.
Fixed assets depending on the purpose and role in the program
Production processes are classified into groups. The name of the groups of fixed assets and their characteristics are presented in
Table 2.1.
Table 2.1.
Classification of fixed assets
NAME OF GROUPS OF FIXED ASSETS | CHARACTERISTICS OF THE GROUP |
1 | 2 |
1. BUILDINGS | Construction objects for industrial purposes (buildings of workshops, warehouses, etc.) |
2. FACILITIES | Facilities serving production (water supply, hydraulic, sewage facilities, etc.) |
Continuation of Table. 2.1
1 | 2 |
3. TRANSFER DEVICES | Devices for the transmission of energy, liquid and gaseous substances (power grids, heating networks, gas networks, etc.) |
4. MACHINERY AND EQUIPMENT Power machines and equipment Working machines and equipment Measuring and regulating instruments and devices Computer engineering, office equipment Other machinery and equipment | Objects that generate or convert energy (generators, electric motors, transformers, etc.) Objects used directly Measuring, regulating and monitoring equipment Equipment of automated control systems, computer centers, etc. Objects that are not included in the specified groups |
5. VEHICLES | Production transport (electric forklifts, electric cars, cars, forklifts, buses, etc.) |
6. TOOL | Tools, general-purpose devices worth more than the legally established minimum with a service life of at least one year |
Continuation of Table. 2.1
1 | 2 |
7. PRODUCTION EQUIPMENT AND ACCESSORIES | Items that facilitate operations or serve to store materials (workbenches, racks, tanks, etc.) |
8. HOUSEHOLD EQUIPMENT | Office and household items (tables, cabinets, etc.) |
9. OTHER FIXED ASSETS | Objects that are not included in the specified groups |
Fixed assets do not include:
low-value items worth less than the established standard, regardless of the service life; fast-wearing means of work with a service life of less than one year, regardless of their cost; finished products in the warehouse of the enterprise, supply and sales organizations; equipment listed on the balance sheet of capital construction, etc.
Low-value and fast-wearing items are taken into account as part of working capital.
According to the nature of participation in the production process, fixed assets are divided into active and passive parts. The active part includes the means of labor that are directly involved in the manufacture of products (machines, equipment, etc.). The passive part includes fixed assets that create conditions for the implementation of the production process (buildings, structures, transfer devices, etc.).
The structure of fixed assets is understood as the ratio of their individual groups in the total amount of fixed assets of the enterprise. The structure of fixed assets used in entrepreneurial activity depends on the size of the enterprise, its type of activity, level of specialization, etc. The largest share in the structure of fixed assets of industrial enterprises is occupied by machinery and equipment.
The composition and structure of fixed assets are not permanent. In the process of activity, the company buys new equipment, carries out reconstruction, writes off worn-out funds.
The following indicators are used to characterize the processes that affect the structure of fixed assets.
The coefficient of renewal (Ko) reflects the intensity of the renewal of fixed assets and is calculated as the ratio of the value of the newly received fixed assets (FP) during the reporting period and their value at the end of the same period (Fc):
The coefficient of disposal (Kvyb) characterizes the degree of intensity of disposal of fixed assets from the sphere of production and is calculated as the ratio of the value of fixed assets disposed of during the reporting period (Fveb) to their value at the beginning of the same period (Fn):
The growth coefficient (QPR) characterizes the level of growth of fixed assets or its individual groups for a certain period and is calculated as the ratio of the value of the growth of fixed assets (FPR) to their value at the beginning of the period (FN):
Generalizing indicators of the technical condition of fixed assets are the coefficients of wear and shelf life.
The depreciation coefficient (Ci) is defined as the ratio of the amount of depreciation (?A) to the original cost of fixed assets (FP):
The coefficient of suitability (Kg) is the ratio of their residual value (Fo) to the original (FP):