What Is Fixed Asset Accounting?

Fixed assets refer to non-monetary assets held by an enterprise for the production of products, provision of labor services, leases, or operation and management that have been used for more than 12 months and have reached a certain value, including houses, buildings, machinery, machinery, and transportation Tools and other equipment, appliances, tools, etc. related to production and business activities. Fixed assets are the means of labor of an enterprise and the main asset on which an enterprise relies on production and operation. From the perspective of accounting, fixed assets are generally divided into fixed assets for production, fixed assets for non-production, leased fixed assets, unused fixed assets, fixed assets not required, fixed assets for financing lease, and fixed assets for donation. ^[1]

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1. The value of fixed assets is generally large, and the use time is relatively long, and it can participate in the production process for a long time and repeatedly.

2. Although abrasion occurs in the production process, it does not change its physical form, but gradually transfers its value to the product according to the degree of wear. The value transfer part is recovered to form a depreciation fund.

As the currency performance of fixed assets, fixed funds also have the following characteristics:

1. The cycle of fixed capital is relatively long. It does not depend on the production cycle of the product, but on the useful life of the fixed assets.

2. The value compensation and physical renewal of fixed funds are carried out separately. The former is completed gradually with the depreciation of fixed assets, and the latter is realized by the depreciation fund that is usually accumulated when the fixed assets cannot be used or should not be used.

3. When purchasing and constructing fixed assets, a considerable amount of monetary funds need to be paid. This investment is a one-off, but the recovery of the investment is carried out by depreciation of the fixed assets in installments.

If an asset is to be recognized as a fixed asset, it must first meet the definition of fixed assets, and then it must meet the recognition conditions for fixed assets, that is, the economic benefits related to the fixed assets are likely to flow into the enterprise. At the same time, the fixed assets Costs can be measured reliably.

Conditions for recognition of fixed assets

1. The economic benefits related to the fixed asset are likely to flow into the enterprise

When an enterprise confirms a fixed asset, it needs to determine whether the economic benefits related to the fixed asset are likely to flow into the enterprise. In practice, it is mainly determined by judging whether the risks and rewards related to ownership of the fixed assets have been transferred to the enterprise.

Under normal circumstances, obtaining ownership of fixed assets is an important sign to judge whether the risks and rewards related to ownership of fixed assets have been transferred to the enterprise. Any ownership that already belongs to the enterprise, whether it is received or owned by the enterprise, can be used as the fixed assets of the enterprise; on the contrary, if the ownership is not obtained, even if it is stored in the enterprise, it cannot be used as the fixed assets of the enterprise. But the transfer of ownership is not the only criterion for judgment. In some cases, although the ownership of a fixed asset does not belong to the enterprise, the enterprise can control the economic benefits related to the fixed asset to flow into the enterprise. In this case, the enterprise should confirm the fixed asset. For example, for a fixed asset leased under a financial lease, although the enterprise (lessee) does not own the fixed asset, the enterprise can control the economic benefits related to the fixed asset flowing into the enterprise and the risks associated with the ownership of the fixed asset. And remuneration has actually been transferred to the enterprise, so it meets the first condition of fixed asset recognition.

2.The cost of the fixed asset can be reliably measured

The reliable measurement of costs is a basic condition for asset recognition. To confirm fixed assets, the expenditures incurred by an enterprise in obtaining the fixed assets must be reliably measured. When determining the cost of fixed assets, an enterprise sometimes needs to make a reasonable estimate of the cost of fixed assets based on the latest information obtained. If the enterprise can reasonably estimate the cost of fixed assets, then the cost of fixed assets can be reliably measured.

Each component of the fixed asset has a different useful life or provides economic benefits to the enterprise in different ways, which applies differently

I. Fixed assets can be classified and accounted for according to their economic use, use, ownership, property form and useful life.

1. Divided into production and business use and non-production business use by economic use

Fixed assets for production and operation refer to fixed assets that directly serve the entire process of production and operation, such as factory buildings, machinery and equipment, warehouses, sales sites, and transportation vehicles. non-

(1) Original value.

Original value is also called historical cost and original cost. It refers to all the price paid by an enterprise for obtaining a certain fixed asset and all reasonable and necessary expenditures incurred before the fixed asset reaches the expected working state. The main advantage of using the original value for pricing is that the original value is objective and verifiable; at the same time, the original value can accurately reflect the scale of the company's fixed asset investment, which is the basis for the company to calculate depreciation. Therefore, the original value is the basic valuation standard for fixed assets. China uses this valuation method for the valuation of fixed assets.

The disadvantage of this valuation method is that when the economic environment and social price levels change, due to the effect of time value of money and changes in price levels, there will be a difference between the original value and the current value, and the original value cannot reflect fixed assets. Real value. In order to make up for the shortcomings of this method of valuation, the enterprise may announce the current replacement cost of the fixed assets in the notes to the annual accounting statements.

After the original value of the fixed assets is registered, the enterprise shall not arbitrarily change or adjust the book value of the fixed assets except for the following situations:

Re-evaluate the value of fixed assets in accordance with national regulations, such as reassessing the value of fixed assets during changes in property rights and shareholding system reforms.

Add supplementary equipment or improve devices.

Remove part of the fixed assets.

Adjust the original tentative valuation value according to the actual value.

The original fixed asset value was found to be incorrect.

(2) Reset the full value.

The full replacement value is also called the current replacement cost, which refers to all the expenses required to repurchase the same fixed assets under the current production technology conditions. Valuation at the replacement complete value can truly reflect the current value of the fixed assets. Therefore, some people advocate replacing the original value as the basis for the valuation of fixed assets. However, this method lacks verifiability and the specific operation is more complicated. It is generally used when the original value of the fixed assets cannot be obtained or the statement needs to be supplemented. If it finds a fixed-asset asset, it can use the replacement full value for accounting. However, in this case, once the replacement full value is recorded, it becomes the original value of the fixed asset.

(3) Net worth.

Net value is also referred to as depreciation value, which refers to the original value or replacement full value of fixed assets minus the net amount after depreciation has been made. The net value of fixed assets can reflect the existing value of fixed assets that have not been worn out in a certain period of time and the amount of funds actually occupied by fixed assets. Comparing the net value with the original value can reflect the new and old degree of the current fixed assets of the enterprise.

In traditional accounting practice, depreciation is the basic form of fixed asset cost amortization. Therefore, the book value of fixed assets is the initial cost on the acquisition date minus the residual value after accumulated depreciation, that is, the acquisition cost of fixed assets that have not yet been amortized. Unlike current assets such as inventory and short-term investments, the carrying value of fixed assets generally does not take into account the effects of changes in market prices. Based on the basic accounting assumptions of continuing operations, people believe that fixed assets are for long-term use in the production and sales process, and do not need to be sold and realized in the short-term. Therefore, in the past, they always adhered to the historical cost (original acquisition cost) as the basis of valuation.

Disposal of fixed assets, including the sale, transfer, retirement and destruction of fixed assets, foreign investment, non-monetary asset exchange, debt restructuring, etc.

I. Conditions for derecognition of fixed assets

A fixed asset shall be derecognized if it meets one of the following conditions:

(1) The fixed asset is in a disposal state;

(2) The fixed assets are not expected to generate economic benefits through use or disposal.

Second, the disposal of fixed assets

(1) For fixed assets held for sale by an enterprise, its estimated net residual value shall be adjusted.

(2) When an enterprise sells, transfers, or discards fixed assets, or the fixed assets are damaged, the amount of disposal income after deducting the book value and related taxes shall be included in the current profit and loss. Fixed assets

Enterprises should choose the depreciation method based on the expected realization of the economic benefits contained in fixed assets. The alternative depreciation methods include the average life method, the workload method, the double declining balance method, and the total years method. Once the depreciation method is determined, it cannot be changed at will. If changes are needed,

At present, it is imperative to control the excessive growth of investment and optimize the investment structure as an important task of macro-control.

China's economic operation is generally relatively stable, maintaining a sound development trend. Fixed asset investment has played an important role in economic growth, but there have also been issues that deserve high attention, such as excessive investment growth. Practice has proved that in order to promote stable and rapid economic development, a moderate investment scale and reasonable

Fixed assets have the characteristics of high value, long service life, scattered use locations, and difficult management. It is for these reasons that it brings great difficulties to the inventory of fixed assets. Roughly manifested in the following: the system is useless and some departments have been established

According to data released by the National Bureau of Statistics of China, from January to December 2012, the nation s fixed asset investment excludes 36,643.5 billion yuan in rural households, a nominal increase of 20.6% year-on-year, after deducting price factors, an actual increase of 19.3%, a growth rate of 0.1 lower than January-November Percentage points, down 3.4 percentage points from 2011. From a month-on-month basis, fixed asset investment excluding farmers increased by 1.53% in December.

By industry, from January to December, the investment in the primary industry was 900.4 billion yuan, a year-on-year increase of 32.2%.

Fixed assets

The growth rate was 1.7 percentage points faster than the period from January to November. The investment in the secondary industry was 15.872 trillion yuan, an increase of 20.2%, and the growth rate dropped by 0.9 percentage points. The investment in the tertiary industry was 19,595.9 billion yuan, an increase of 20.6%, and the growth rate was accelerated by 0.2 percentage points. In the secondary industry, industrial investment was 15.4636 trillion yuan, an increase of 20%, a growth rate of 1.1 percentage points lower than that in January-November; of which, investment in the mining industry was 1,132.9 billion yuan, an increase of 11.8%, and the growth rate was 0.4 percentage points lower; manufacturing investment 124,971 billion yuan, an increase of 22%, a growth rate of 0.8 percentage points; the investment in the production and supply of electricity, heat, gas and water was 1,653.6 billion yuan, an increase of 12.8%, a decrease of 3.4 percentage points.

By region, from January to December, the investment in the eastern region was 1,693.9 billion yuan, an increase of 17.8% year-on-year, a growth rate of 0.2 percentage points lower than that in the first 11 months; the investment in the central region was 1,031.3 billion yuan, an increase of 25.8%, and the growth rate decreased by 0.4 percentage points. ; The investment in the western region was 86150 billion yuan, an increase of 24.2%, and the growth rate was the same as that of January to November.

In terms of registration types, from January to December, domestic-invested enterprises invested 3,424.8 billion yuan, a year-on-year increase of 21.2%, a growth rate of 0.2 percentage points lower than that of January-November; Hong Kong, Macao, and Taiwanese investment was 1,018.5 billion yuan, an increase of 8%, and the growth rate fell 0.8 percentage points; foreign investment was 106.3 billion yuan, an increase of 14.5%, and the growth rate accelerated by 2.7 percentage points.

From the perspective of project affiliation, from January to December, the investment in central projects was 2,116.6 billion yuan, an increase of 5.9% year-on-year, and the growth rate was 0.2 percentage points lower than that in January-November. It was unchanged in November.

From the perspective of construction and newly started projects, from January to December, the total planned investment for construction projects was 74,237.9 billion yuan, an increase of 18.1% year-on-year, and the growth rate was 1.8 percentage points faster than that from January to November; The year-on-year growth rate was 28.6%, and the growth rate dropped by 0.2 percentage points.

From the perspective of the funds in place, the funds in place from January to December were 399,440 billion yuan, an increase of 18.6% year-on-year, and the growth rate fell 0.2 percentage points from January to November. Among them, national budget funds increased by 29.7%, and the growth rate dropped by 1.6 percentage points; domestic loans increased by 8.4%, and the growth rate dropped by 1.4 percentage points; self-funded funds increased by 21.7%, and the growth rate accelerated by 0.1 percentage points; utilization of foreign capital decreased by 10.9%, a decrease It is 0.5 percentage points higher than that in January-November; other funds increased by 13.7%, the growth rate was the same as that in January-November.