Non-financial assets - what is it?
What is non-financial assets? In this article, it will be about this. We propose to examine in more detail the structure and subspecies of this object.
The concept and structure of nonfinancial assets
Non-financial assets are objects thatare in the use of business entities, while they bring them a potential or real economic profit as a result of their exploitation. On what subspecies they are divided?
Depending on the method of creation, non-financial assets are divided into non-production assets and production assets. Let us consider in more detail what they represent.
Production non-financial assets
Production assets are fixed assets(PF), which are used repeatedly or permanently for a long time (not less than a year) for the production of goods and services. But there are exceptions. Fixed assets do not include commodities that are single-use: coal, plants, animals, and so on.
The fixed assets (tangible) are (ornon-financial assets include): buildings (non-residential), structures, equipment and machinery. Also here you can include: vehicles, various kinds of inventory (economic and production), perennial plantations, working cattle (except for young animals and intended for slaughter), tangible fixed assets that are not in other groups (libraries, animals in zoos).
There is also the concept of intangible fixed assets. What it is? They are intangible productive assets. They are represented by information that is on a closed material carrier. What does it mean? The cost of intangible production media is determined by the price of this information, and not the carrier itself. Intangible funds (basic) include: computer software, geological exploration, works of entertaining nature, literature and art. This includes high technology (industrial) and others.
Intangible assets (in accounting)are reflected without division into production and non-production groups. This has a negative effect on statistics. When evaluating the role of PF in production, it is important to separate them into active and passive.
In accounting, a similarthe term "fixed assets", which refers to non-financial assets. This concept can be viewed from the other side. Assets can be attributed to fixed assets if the following conditions are met:
1. The organization is not going to resell these assets.
2. The institution expects to receive profit in the future.
3. The operation of the organization of assets of more than 12 months or more.
4. Use in production, in the performance of work, services or in management needs.
The "fixed assets" should includethe same facilities as in "fixed assets", plus capital investments to improve the state of land, leasing objects, plots, units of natural use.
In accounting, there is no concept of "intangible fixed assets." How does it look like? Residual value of fixed assets is included in the balance sheet.
Next stage. Fixed assets are reflected in the accounting at their primary cost.
Non-financial assets are also values. They are expensive goods that are not intended for production and consumption. These values retain their value over time. They include: stones and precious metals (not used in the enterprise as a resource base for production); works of art and antiques; values that are not related to other categories (high value jewelry, collections).
Non-productive intangible assets
What it is? Non-productive intangible non-financial assets are legal forms that are formed in the production process and are able to move from one unit (institutional) to another. These include documents that allow the owner to engage in specific activities. At the same time, they exclude other units (institutional) from this functioning, except for the permission of the owner.
These assets include:
1. Lease agreements and various agreements with the right of transfer (purchased good-villas - a conditional estimated value of reputation).
2. Objects of patenting are the latest inventions, which are characterized by technical novelty, which are provided with judicial protection based on the law.
Material non-productive assets
Consider this concept. Material non-productive non-financial assets are economic (natural origin) funds. They can be: renewable or not naturally (land, reservoirs on its surface with the property right extending to them). What else is in this group? These are underground resources (water), minerals (mineral wealth), natural biological resources (uncultivated) - animal and plant world.
Non-financial assets in budget accounting (PB)
In the budgetary accounting, the state (municipal)property is recorded as non-financial assets. The main document regulating the procedure for managing the BU of these objects is the Instruction on the BU (Order of the Ministry of Finance of 26.08.2004 №70n).
Nonfinancial assets of the BU can be divided into groups: fixed assets (machinery and equipment, structures, residential and non-residential premises, vehicles, inventory, production, economic and soft). It also includes: a library fund, jewelry, jewelry and other fixed assets. The list continues to produce non-produced assets (subsoil resources, land plots, electromagnetic spectrum and others). Intangible assets, inventories (dressings and medicines, food, construction, fuel and lubricants, other), depreciation - all this is included in this group.
More details on non-financial assets in the budget account can be found in the Order of the Ministry of Finance of 26.08.2004 №70n.
Accounting for investments in non-financial assets
What it is? To account for investments in non-financial assets, the account is 0.106 million (investments). This method is not the only one.
All accounts can be found in specialized literature.
