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Aspects of accounting for fixed assets

Large enterprises, at the beginning of their activities, when selling the authorized capital, and small enterprises a little later, receive the task of putting on the balance sheet (accounting) of property.
It doesn’t matter if it is real estate or other organizational equipment (printers, computers, etc.). The main task is for the company to be able to enter the costs of servicing such property in accounting costs to legally reduce the taxable base for corporate income tax, as well as make depreciation deductions for the same purpose. Earlier, we discussed the issue of registering leased property on the balance sheet, and in this article we will reveal the topic of proper accounting support when a company buys real estate and putting it on the balance sheet.

Real estate refers to fixed assets, therefore, aspects of accounting methods arise when reflecting real estate transactions. So, the groups of elements of the accounting method 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 faced by the accounting department when buying a property is proper documenting and review. Therefore, the elements of the accounting method (hereinafter referred to as the method) during the initial observation will be:


When documenting, it is important to correctly reflect the business transaction, that is, the presence of an act of acceptance and transfer of the asset, an act to write off the asset, the calculation of depreciation, the inventory list of the asset, that is, the correct reflection in the primary documents. An important aspect is the inventory, that is, the establishment of the fact by the commission or the person in charge of the initial availability, condition of real estate and the corresponding reconciliation with the above primary documents.

In monetary measurement, the following methods are used:


When assessing, it is important to determine the fair value (by contacting experts in valuation activities) or to use information from the primary documents that indicate the initial cost. The determination of the initial cost of investment property is carried out in accordance with clause 10-14 P (C) BU 32, and operating – clause 8 P (C) BU 7.

When grouping, the methods are:

Accounting accounts;
Double entry.

Accounting for investment property is reflected on subaccount 100 “Investment property”, and operating – 101 “Land plots”, 103 “Buildings and structures”. Distinguishing between sub-accounts 101 and 103 shouldn’t be a problem. Double reflection in the accounting of the accounting of a business transaction with real estate is carried out on the debit of one and the credit of another account, with the same amount.

When summarizing data, the following methods are used:

Balance sheet;
Financial statements.

The balance is reflected in the asset (form number 1) and refers to the composition of non-current assets. The reporting is displayed in the Balance Sheet (form No. 1); Statement of financial results (form No. 2) Statement of cash flows (form No. 3); Equity statement (form No. 4); Notes to the annual financial statements (form number 5).

In fact, real estate accounting is an extremely demanding job, so please contact Prikhodko & Partners Law Firm, we will provide you with competent legal and accounting assistance.

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