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ASPECTS OF ACCOUNTING FIXED ASSETS

 Large enterprises, at the beginning of their activities, in the sale of authorized capital, and small enterprises a little later, receive the task of setting the balance (accounting) of property.

 It doesn’t matter if it’s real estate or other organizational equipment (printers, computers, etc.). The main task is that the company can enter the cost of maintenance of such property in the accounting costs to legally reduce the tax base for corporate income tax, as well as to make depreciation deductions for the same purpose. Earlier we discussed the issue of registration of leased property on the balance sheet, and in this article we will reveal the topic of proper accounting support when buying real estate and putting it on the balance sheet.

 Real estate is a fixed asset, so important aspects of accounting methods in the reflection of real estate transactions. Thus, the groups of elements of the method of accounting, in the implementation of the investigated operations include primary observation, monetary measurement, grouping and generalization of data. Let’s dwell on them in more detail.

 The first aspect when buying property that is faced by accounting is the correct documentation and review. Therefore, the elements of the method of accounting (hereinafter – the Method) in the initial observation will be:

Documentation;
Inventory.

 When documenting, the correct reflection of the business transaction is important, ie the presence of the act of acceptance-transfer of health, the act of writing off health, depreciation calculation, inventory of health, ie the correct reflection in the primary documents. An important aspect is the inventory, ie the establishment of the fact by the commission or the responsible person of the initial availability, the condition of real estate and the corresponding reconciliation with the above primary documents.

At monetary measurement methods are used:

Evaluation;
Calculation.

 When valuing, it is important to determine the fair value (by contacting valuation experts) or to use information from primary documents that will indicate the initial cost. Determination of the initial value of investment property is carried out in accordance with paragraphs 10-14 P (S) BU 32, and operating – paragraph 8 P (S) BU 7.

When grouping methods are:

Accounting accounts;
Double entry.

 Accounting for investment property is reflected on sub-account 100 Investment property, and operating – 101 Land, 103 Buildings and structures. Distinguishing subaccounts 101 and 103 should not cause problems. Double reflection in the accounting of real estate transactions is carried out by debiting one and crediting another account, with the same amount.

When generalizing data, the following methods are used:

Balance sheet;
Accounting.

 The balance sheet is reflected in the asset (form № 1) and is part of non-current assets. Reporting is reflected in the Balance Sheet (form № 1); Statement of financial results (form № 2); Cash flow statements (form № 3); Statement of equity (form № 4); Notes to the annual financial statements (form number № 5).

 In fact, real estate accounting is an extremely responsible job, so contact the law firm “Prikhodko and Partners”, we will be happy to help you.

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