The issue of revaluation of fixed assets

Abstract

Modern concepts of accounting development relate to the evolution of the preparation and processing of accounting and analytical information generated within the accounting system of organization. Each economic entity predominantly uses information presented in financial reports involving the value of the enterprise’s assets, including information on fixed assets as documentary evidence of its reliability in investment relations to attract potential investors and partners as well as to receive credit financing. Since fixed assets are an essential component of all assets, improving the efficiency of their use through a qualitative estimation of their value can be considered one of the leading areas of improving accounting of enterprises. However, the real value of certain units of fixed assets can change drastically, which necessitates an annual revaluation. Given possible issues in practical application of international financial reporting standards, introduction of indexation system for self-calculation of coefficients of rapid revaluation of fixed assets (tangible non-financial assets) of the organization is highly important. Certainly, this method requires a professional approach, starting with acquisition, construction or creation of fixed assets. In this context, this Article Purpose is to substantiate the need to implement an indexation system for each unit (group) of fixed assets of organization, which are subject to interim revaluation in the future, from the very moment of their acquisition.