home Designer To reproduce fixed assets, an enterprise uses a fund. Simple and expanded reproduction of fixed assets. Sources of financing for the reproduction of fixed assets

To reproduce fixed assets, an enterprise uses a fund. Simple and expanded reproduction of fixed assets. Sources of financing for the reproduction of fixed assets

The material and technical basis of the production process at any enterprise is the main production assets. In a market economy, the initial formation of fixed assets, their functioning

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Ministry of Education of Ukraine

Dnepropetrovsk State University

Faculty of Radiophysics

Department of ASOI

in the discipline "Enterprise Economics" on the topic: "Reproduction of fixed production assets"

Dnepropetrovsk

Introduction 3

Main production assets 4

Sources of financing for the reproduction of fixed assets. 7

Purpose of depreciation in simple and expanded reproduction of fixed assets 12

The role of depreciation in the accumulation of fixed assets. 15

List of references 19

Introduction

The material and technical basis of the production process at any enterprise is the main production assets. In a market economy, the initial formation of fixed assets, their functioning and expanded reproduction are carried out with the direct participation of finance, with the help of which funds for special purposes are formed and used, mediating the acquisition, operation and restoration of means of labor.

This abstract will discuss methods for reproducing OPF.

Main production assets

The initial formation of fixed assets at newly created enterprises occurs at the expense of fixed assets that are part of the authorized capital. Fixed assets are funds invested in fixed assets for production and non-production purposes.

OPF industry is a huge number of means of labor, which, despite their economic homogeneity, differ in purpose and service life. Hence the need arises to classify fixed assets into certain groups that take into account the specific production purposes of various types of assets.

Buildings are architectural and construction objects designed to create the necessary working conditions. Buildings include production buildings of workshops, depots, garages, warehouses, production laboratories, etc.

Structures - engineering construction objects intended for certain technological functions are necessary for the implementation of the production process with changes in objects of labor. Structures include pumping stations, tunnels, mats, etc.

Transmission devices with the help of which energy of various types is transmitted, as well as liquid and gaseous substances, oil and gas pipelines, etc.

Machinery and equipment, including:

Power machines and equipment designed for generating and converting energy - generators, engines, etc.;

Working machines and equipment used directly for the construction of an object of labor or for its movement in the process of creating products or services, that is, for direct participation in technological processes (machines, presses, hammers, hoisting and transport mechanisms and other main and auxiliary equipment);

Measuring and control instruments and devices, laboratory equipment, etc.;

Computer technology is a set of tools designed for accelerated automation of processes related to solving mathematical problems, etc.;

Other machinery and equipment.

Vehicles designed to transport goods and people within and outside of enterprises.

Tools of all types and devices attached to machines that are used for processing the product (clamps, vices, etc.).

Manufacturing Tools to Facilitate Manufacturing Operations
(desks, workbenches), storage of liquid and bulk solids, labor protection, etc.

Household equipment.

Methods for assessing fixed assets depend on the sources of their receipt by the enterprise. Thus, the initial cost of fixed assets received from capital investments of an enterprise includes the actual costs of their construction or acquisition, delivery and installation costs, as well as the amount
VAT. Fixed assets received from the founders of the joint-stock company on account of their contributions to the authorized capital are valued at the cost determined by agreement of the parties. If used fixed assets were received free of charge from other enterprises or as a subsidy from government agencies, then they are valued at their residual value.

At the time of acquisition of fixed assets and their acceptance on the balance sheet of the enterprise, the value of fixed assets quantitatively coincides with the value of fixed assets. Subsequently, as fixed assets participate in the production process, their value bifurcates: one part, equal to wear and tear, is transferred to finished products, the other expresses the residual value of existing fixed assets.

The worn-out part of the value of fixed assets transferred to finished products, as the latter is sold, is gradually accumulated in cash in a special depreciation fund. This fund is formed through monthly depreciation payments and is used for simple and partially expanded reproduction of fixed assets.
The direction of depreciation for the expanded reproduction of fixed assets is determined by the specifics of its accrual and expenditure: it is accrued throughout the entire standard service life of fixed assets, and the need for its expenditure occurs only after their actual disposal. Therefore, until the replacement of retired fixed assets, accrued depreciation is temporarily free and can be used as an additional source of expanded reproduction. In addition, the use of depreciation for expanded reproduction is facilitated by scientific and technological progress, as a result of which some types of fixed assets can become cheaper, and more advanced and more productive machines and equipment are introduced.

Depreciation deductions are made by enterprises on a monthly basis according to the norms of the book value of fixed assets for individual groups or inventory items. During the year, the monthly depreciation amount is determined as follows: depreciation charges for received objects are added to the amount accrued for the previous month and the depreciation amount for retired objects in the previous month is subtracted. At the same time, the amount of depreciation charges made last month is adjusted due to the expiration of the service life of fully depreciated fixed assets this month. Depreciation accrual stops during the period of reconstruction or technical re-equipment of fixed assets with their complete stop. During this time, their standard service life is extended.
Depreciation deductions are also not made in the case of transferring fixed assets to conservation.

Economically sound depreciation rates are of great importance. They make it possible, on the one hand, to ensure full reimbursement of the cost of decommissioned fixed assets, and on the other hand, to establish the true cost of production, an integral element of which is depreciation charges. From the point of view of commercial calculation, it is equally bad to underestimate depreciation rates (because it can lead to a lack of financial resources necessary for the simple reproduction of fixed assets) and their unreasonable overestimation, causing an artificial increase in the price of products and a decrease in production profitability. Depreciation rates are periodically revised as the service life of fixed assets changes, the process of transferring their value to the manufactured product accelerates under the influence of scientific and technological progress and other factors.
Fixed assets are also periodically revalued; its goal is to bring the book value of fixed assets into line with current prices and reproduction conditions.

Depreciation deductions are made during the standard service life of fixed assets or the period during which their book value is completely transferred to production and distribution costs.

Depreciation deductions are credited to the current account and spent directly from the current account to finance new capital investments in fixed assets or are directed to long-term financial investments, for the purchase of building materials, equipment, and intangible assets.

At the time of disposal of an object from the enterprise, its original cost is compared with the amount of accumulated depreciation charges. Result
(profit or loss) is included in the financial results of the enterprise.

In business practice, different methods of calculating the depreciation fund are used: linear, regressive, accelerated depreciation. In this case, depreciation rates are established either as a percentage of the book value of fixed assets, or in fixed amounts per unit of output; sometimes they depend on the amount of work performed.

With the linear method, depreciation amounts are calculated at fixed rates throughout the entire period of productive use of fixed assets. The use of the uniform method of calculating depreciation in conditions of stable prices for the main types of labor was justified. But in conditions of rising prices, especially for newly introduced equipment, it is advisable to switch to the regressive method, in which the highest depreciation rate is established at the beginning of the depreciation period, and then it gradually decreases. In conditions of inflation, the transition to a regressive method of calculating depreciation contributes to the timely accumulation of financial resources necessary for the renewal of fixed assets.

In accordance with the Regulations on the procedure for calculating depreciation on fixed assets in the national economy, many business entities are allowed to use the accelerated depreciation method. These include enterprises producing computer equipment, advanced types of materials, instruments and equipment, products for export, as well as those carrying out mass replacement of worn-out and obsolete equipment.
The named enterprises received the right to calculate depreciation charges at an increased, but not more than double, depreciation rate. This means that they define a new estimated life for their fixed assets that allows for full depreciable value carryover within a short period of time. For small enterprises, even more favorable conditions are provided in terms of reimbursement of the cost of tools: In the first year of operation of machinery and equipment, they will be able to write off additionally as depreciation charges up to 20% of the original cost of fixed assets (with a service life of more than 3 years). This measure is aimed at stimulating the renewal of the production apparatus based on the latest achievements of science and technology, which is simply necessary due to the uncompetitiveness of most domestic industrial goods.

In connection with the changes in prices for machinery, equipment and vehicles and the estimated prices for construction and installation work, as well as in order to increase the share of depreciation charges in the total amount of own sources of financial resources of enterprises ensuring the reproduction of fixed assets, it was introduced on January 1, 1992 indexation of depreciation charges for all enterprises and organizations, regardless of their form of ownership.

The mechanism for the formation and use of depreciation charges, being an important link in the overall system of reproduction of fixed assets, is at the same time a tool for implementing state structural policy in the field of industrial investment. Achieving structural changes is carried out primarily through depreciation rates.

Sources of financing for the reproduction of fixed assets.

Sources of financing for the reproduction of fixed assets are divided into own and borrowed.

Reproduction has two forms: simple reproduction, when the cost of compensating for the depreciation of fixed assets corresponds to the amount of accrued depreciation; expanded reproduction, when the cost of compensating for the depreciation of fixed assets exceeds the amount of accrued depreciation.

Capital expenditures for the reproduction of fixed assets are long-term in nature and are carried out in the form of long-term investments in new construction, in the expansion and reconstruction of production, in technical re-equipment and in supporting the capacities of existing enterprises.

Sources of firms' own funds to finance the reproduction of fixed assets include:

Depreciation;

Depreciation of intangible assets;

Profit remaining at the disposal of the company.

The sufficiency of sources of funds for the reproduction of fixed capital is crucial for the financial condition of the company.

Borrowed sources include:

Bank loans;

Borrowed funds from other companies;

Equity participation in construction;

Funding from the budget;

Financing from extra-budgetary funds.

The issue of choosing sources of financing for capital investments must be decided taking into account many factors: the cost of attracted capital; efficiency of return from it; ratio of equity and borrowed capital; economic interests of investors and lenders.

The circulation of fixed assets includes 3 phases: depreciation, amortization and compensation. Depreciation and amortization occur during the production use of fixed assets, and compensation occurs as a result of their creation and restoration. As they are used, the elements of the means of labor physically wear out and their technical properties deteriorate. So-called mechanical wear occurs, as a result of which the means of labor lose their ability to participate in the manufacture of products. In other words, their use value decreases. Fixed assets are subject to physical wear and tear not only due to their productive use, but also under the influence of natural forces. Both during operation and during inaction under the influence of atmospheric conditions, the gradual, destructive actions of natural metabolism, metal corrosion and wood rot occur, i.e., individual parts of fixed assets are deformed and destroyed. Work equipment can also fail as a result of emergencies such as fires, floods, earthquakes and other natural disasters.

The amount of physical deterioration of fixed assets depends on the quality of their manufacture, technical parameters incorporated in the creation process and predetermining durability. In addition, the level of physical wear and tear of fixed assets depends on the degree of their loading in the process of productive use. The greater the shift of equipment and the more intensive its workload in time and power, the higher the level of wear. Along with this, wear depends on the level of qualifications of workers, compliance with appropriate operating conditions, protection from adverse environmental conditions, quality of care and timeliness of repairs.

Along with physical wear and tear, labor tools are subject to obsolescence, in which machines and equipment that are still quite suitable in terms of their material condition become unprofitable to operate in comparison with new, more efficient models of equipment. There are two forms of obsolescence. The first is when, as a result of scientific and technological progress, which determines the growth of labor productivity in industries producing means of production, such machines are produced at lower costs. When the production of new, cheaper machines becomes widespread, the cost of existing means of labor with similar technical characteristics decreases. Indeed, at any given moment, the value of goods is determined not by individual costs, but by the amount of socially necessary labor time for its production. New machines of a similar design are produced more cheaply and therefore transfer a smaller share of the cost to the finished product, which makes them more efficient to operate and encourages early replacement of older equipment.

The second form of obsolescence is a decrease in the cost of functioning means of labor as a result of the introduction into production of new, more progressive and economical equipment. New machines can be more productive, that is, they can produce more products per unit of time. Changes in the quality characteristics and consumer properties of manufactured products are possible. One of the advantages of new equipment may be the possibility of introducing more advanced technology, leading to savings in material resources and improved working conditions. An increase in the efficiency of new types of equipment can also be the result of saving production space, better reliability and efficiency in operation, greater maintainability, etc. As a result, the operation of old machines becomes unprofitable, which necessitates their early replacement.

The use of obsolete, although not yet physically worn out, equipment leads to a relative increase in production costs and hinders the improvement of technological processes. A problem arises: incur losses from the early replacement of obsolete labor tools and gain savings from the introduction of more advanced technology, or operate obsolete equipment until its cost is completely written off, but at the same time lose the opportunity to increase production efficiency in the future. As a rule, comparisons indicate in favor of early replacement of machines for the purpose of technical improvement of production, the effect of which far exceeds losses before early write-off.

If the basis of physical wear and tear is the influence of material factors of the external environment and internal metabolic physical and chemical processes that destroy the materials from which the means of labor are created, then the basis of both forms of obsolescence is scientific and technological progress. It predetermines both the reduction in cost of means of labor and the emergence of new types of equipment and products. In accordance with the nature of the reasons, the loss of use value and the value of means of labor as a result of physical and moral wear and tear occurs differently. If physical wear and tear occurs, as a rule, evenly as fixed assets are used or gradually exposed to the forces of nature, then certain types of means of labor are unevenly affected by obsolescence due to the unevenness of scientific and technological progress. Thus, it has the greatest impact on the active part of fixed assets, since changes in the designs of machinery and equipment are more dynamic compared to the improvement of the designs of buildings and structures. The impact of obsolescence is uneven in different sectors of the national economy. It is especially noticeable in industries that determine scientific and technological progress. The second form of obsolescence has the most significant impact in the first period of introduction of new technology; as innovations become widespread, its impact gradually decreases.

Wear and tear is not the same as wearing out. All created fixed assets, both active and inactive, are subject to wear and tear, regardless of their participation in the production process (production and non-production).
Wear is an objectively existing phenomenon. Wear is an economic process, a reflection of wear and tear in economic reality. Wear-out, or economic wear and tear, is the process of loss of value by means of labor. The cause of wear can be both physical and moral wear and tear.

Wear is the basis of depreciation. Compensation for wear does not occur during the formation of the depreciation fund, but during its subsequent use to replace outdated equipment and during major repairs and modernization.

Depreciation is the portion of the cost transferred to the product.
Its movement is included in both the production process and the circulation process.
The cash depreciation fund is the financial result of the accumulation of successively carried out depreciation charges. It is formed only after the sale of finished products.

Depreciation can be defined as the process of gradually transferring the cost of labor to the cost of finished products. Depreciation deductions are that part of the cost of means of labor that, in each new circulation of enterprise funds, as they wear out, is separated and continues to move as part of the new value, first in the form of work in progress, then as part of the cost of finished products, and after its sale is accumulated in the reserve fund funds intended to reimburse advance costs for fixed assets.
Thus, the difference between depreciation and depreciation of fixed assets is clearly outlined. If wear and tear is the loss of use value, and therefore the cost of means of labor, then depreciation means the process of transferring value to the finished product. Both processes, despite their differences, are inseparable as two sides of the same phenomenon. Therefore, depreciation charges, while reflecting the amount of transferred value, simultaneously show the degree of depreciation of fixed assets.

The depreciation movement covers the stages of production and circulation of products manufactured on this equipment over the entire period of its operation. This process does not coincide with the replacement of fixed assets, which is wider in scale than depreciation by the amount of the period of creation of new capacities to replace retired ones. The period of converting the depreciation fund into new tools, in our opinion, cannot be included in the depreciation process; this is a new, independent stage in the circulation of funds. The purpose of depreciation is to reimburse costs incurred in fixed assets, accumulate and return invested funds, and not ensure the reproduction of production potential.

The amount of depreciation must correspond to the actual participation of the used fixed assets in the formation of new value. If this is not achieved when constructing depreciation rates, and less or more funds are written off for depreciation than is objectively necessary, funds are transferred from the compensation fund to the accumulation fund or vice versa. At the same time, the reliability of accounting for financial sources of reproduction is violated, and, consequently, the ability to manage their rational spending is complicated. Such deviations must be neutralized by timely adjustment of depreciation rates. More depreciation cannot be written off on products and no less should be written off than is due to the actual costs of fixed assets for production. Depreciation rates must be structured in such a way as to ensure full reimbursement of advanced investments in fixed assets, regardless of future renovation needs. If, after the period of turnover of fixed assets, the price of a unit of production capacity increases, then additional resources to create new funds to replace retired ones must be found from the national income accumulation fund. Depreciation should not predetermine the possibilities for future development of production.

To adequately reflect by depreciation the process of transferring the cost of equipment to the manufactured product, two problems need to be solved: to give a reliable estimate of this cost and to correctly organize the procedure for writing it off to cost using depreciation rates. What should be transferred to the manufactured product is not that part of the cost of the machines at which they were purchased several decades ago, but that which they possess at any given moment in time. Depreciation should be calculated not from the original cost, but from the replacement cost of the means of labor. Moreover, for the reliability of depreciation calculation, it is important to revaluate fixed assets as often as possible.

The calculation of depreciation in our country over a long period of time was divided into complete restoration and major repairs.
At the same time, the preliminary standardization of costs for major repairs as part of depreciation contradicts its essence. Depreciation is the gradual repayment of investments made in fixed assets at the expense of the cost of production, and the use of funds for major repairs in relation to the time of depreciation is, as a rule, an element of the costs of the future period. In other words, the costs of purchasing new equipment and repairing them are fundamentally different.

Hence the difference in the methods of financing the costs of complete restoration and major repairs. If reimbursement of funds advanced to fixed assets involves the regular inclusion in the price of manufactured products of the corresponding share of wear and tear on fixed assets, then to finance repairs, as well as other elements of current production costs, preliminary rationing as part of depreciation rates is not required. These costs should be directly included in the cost of production as repairs are required.

If the costs of major repairs are necessarily included in the cost of production through depreciation rates, then there is no incentive to reduce them. If these costs are included in the cost of production as needed, without prior rationing, then, if there is economic feasibility, there is an interest in replacing outdated equipment with new ones without carrying out ineffective repairs.

Purpose of depreciation in simple and expanded reproduction of fixed assets

According to its economic purpose, the depreciation fund must accumulate financial resources for the simple reproduction of fixed assets, i.e., ensure the replacement of retiring means of labor. Statistics show that the annual amounts of depreciation charges significantly exceed the size of the corresponding disposal of fixed assets. The excess of accrued depreciation on the annual disposal of fixed assets has a steady upward trend. In this regard, in economic theory and business practice, an opinion has developed about the natural nature of excess depreciation in comparison with the need for funds to restore worn-out funds and the possibility of its withdrawal for accumulation.

The question of the possibility of using depreciation charges for expanded reproduction is one of the most complex and controversial. It has been discussed in the economic literature for many years, but has not been finally resolved. An opinion is expressed that the depreciation fund cannot serve as a source of accumulation of fixed assets. At the same time, most economists argue that in modern conditions, depreciation charges are naturally a source of expanded reproduction of fixed assets, a source of their accumulation. Many researchers, while recognizing the direct economic purpose of the depreciation fund as a source of simple reproduction, do not exclude the possibility of using it for expanded reproduction.

In connection with the growth of production potential, the need to intensify its use puts forward special requirements for the policy of reimbursement of labor resources, the shortcomings of which are currently manifested in a decrease in the rate of replacement of worn-out assets, the accumulation in some sectors of the national economy of a significant amount of obsolete equipment with all the ensuing negative consequences. Therefore, rational use of the depreciation fund is a significant reserve for increasing production efficiency. The apparent excess of the accrued amounts of depreciation of the needs for compensation of retired means of labor, the natural formation of a constant surplus of funds in the depreciation fund, which supposedly can be used for accumulation, is explained, as a rule, by the action of two factors - scientific and technological progress and the peculiarities of the circulation of fixed assets. In connection with scientific and technological progress, labor productivity is increasing, so the cost of reproduction of fixed assets should decrease. As a result, to compensate for their use value, less funds are required than accumulated in the depreciation fund. In other words, in order to restore the total functionality of retired tools, it is necessary to spend less money than provided for by depreciation standards. Restoring the used means of production to their previous sizes leads to an increase in their power and efficiency. In this case, the amount of accumulated depreciation makes it possible to meet the needs of not only simple, but also expanded reproduction.

However, the effect of scientific and technological progress is not the result of the turnover of the compensation fund. It is formed as a result of additional investments from the accumulation fund in the development of science and technology and is the result of the use of a pure product.

If, as a result of scientific and technological progress, the cost of reproduction of a unit of production capacity decreases, then the depreciation fund should be reduced by the corresponding amount. Otherwise, the mechanism for calculating depreciation will not be linked to the real process of transferring value. If more funds are allocated from the volume of the produced product to the compensation fund than is due to the actual costs of production, then as a result the value of national income is underestimated. In this case, the depreciation fund accumulates, along with the funds necessary to compensate for the means of labor, part of the accumulation fund. And, conversely, with an increase in the cost of reproduction of a unit of production capacity, a corresponding increase in the depreciation fund is necessary. Otherwise, it cannot fully cover the needs for reimbursement of labor.

If the initial cost of the means of labor, based on which
"the amount of depreciation is calculated, coincides with the replacement cost, and depreciation rates correctly reflect the possible service life of fixed assets, and these terms are met, then the depreciation fund can only meet the needs of simple reproduction. If these conditions are not met, then the size of the depreciation fund deviates from the needs of normal compensation and must be adjusted. If the depreciation fund has accumulated part of the funds that, if properly calculated, should have been included in the accumulation fund, then their excess can be withdrawn to expand production. The insufficient accrual of funds to the compensation fund must be replenished from the accumulation fund. Thus, the surplus of funds in the depreciation fund is not the result of scientific and technological progress, but is formed due to shortcomings in the depreciation system.

In conditions of a decrease in the rate of accumulation of fixed assets, the depreciation fund, with its partial withdrawal, still meets the needs for compensation.
The withdrawal of excess depreciation amounts really does not infringe on simple reproduction. However, when making additional investments from the accumulation fund, one should focus not on simple, but on expanded reproduction. Therefore, before removing the visible excess depreciation, it is necessary to determine how this will affect the rate of expansion of production provided for by additional investments.

When making additional capital investments in any economic link, it does not make sense to partially withdraw it - a means of depreciation for accumulating the potential of other production links.
By investing capital funds, we assume a certain rate of expansion, and by withdrawing depreciation, we reduce the planned rate. This means that if a certain economic link has reached a state in which it fully satisfies social needs, and it becomes possible to reduce the rate of expanded reproduction in this link, then this should be done not by withdrawing the depreciation fund, but by reducing funding from the accumulation fund.

Thus, depreciation in itself cannot be a source of accumulation of fixed assets, either during simple or expanded reproduction. The constant excess of the accrued depreciation of the annual disposal of fixed assets during expanded reproduction is natural. It is due to additional attraction of funds and represents the accumulated depreciation of newly introduced fixed assets. The removal of visible excess depreciation is unacceptable, as this complicates the reproduction process. If the process of calculating depreciation corresponds to the real process of transferring value, the depreciation fund should be used only for its intended purpose. The accrued depreciation should remain entirely at the disposal of enterprises and be used by them to finance the simple reproduction of fixed assets.

The role of depreciation in the accumulation of fixed assets.

The processes of accumulation and replacement of fixed assets are closely interrelated.
Distinguishing them is very problematic, which gives rise to a lot of opposing conclusions when analyzing the same economic phenomena. Thus, the study of statistical indicators of the reproduction of fixed assets by some researchers led to the conclusion that there is a process of overaccumulation and the created production capacities are excessive compared to the real capabilities of society. Other economists argued that accumulation processes were undergoing a crisis, that the country was lagging behind the industrialized powers in actual per capita accumulation. Therefore, increasing the rate of accumulation is an urgent vital necessity.

Reimbursement and accumulation of fixed assets can be analyzed by studying the structure of sources of financing capital investments, as well as by studying the balance sheet indicators of fixed assets, reflecting trends in their input, retirement and depreciation. Let us consider both directions in order to identify the existing relationships between compensation and accumulation and their influence on each other.

The sources of financing capital investments are part of the national income replacement fund, which includes depreciation for renovation, and part of the accumulation fund, used to create fixed assets. Thus, gross capital investment consists of costs financed by depreciation and so-called net capital investment, the source of which is national income. The resources of the depreciation fund should reflect the costs of compensating for the wear and tear of labor instruments, and net capital investments should reflect the accumulation process.

In the structure of sources of financing capital investments, the share of depreciation naturally increased. This is an objective trend caused by the growth of production potential. After all, the larger the volume of basic funds, the more funds are needed to reimburse them annually.

The use of depreciation resources for accumulation is unlawful. In its essence, depreciation is only a source of simple reproduction. If the process of calculating depreciation corresponds to the process of transferring value, the depreciation fund can serve as a source only of compensation for the means of labor. The diversion of its resources for accumulation leads to significant losses of living and materialized labor. The long-term withdrawal of renovation resources in favor of accumulating means of labor has led to the accumulation of an excess need for compensation, which can now only be realized if the resources of the accumulation fund are temporarily used.

Thus, an analysis of the sources of financing capital investments indicates a discrepancy between the actual processes of accumulation and compensation and the financial resources intended for them. The amount of accumulation exceeds the national income resources intended for these purposes, which occurs to the detriment of normative compensation.

Let's analyze the same processes in a different way. Let's consider the ratio of accumulation and compensation of means of labor based on the indicators of the balance of fixed assets. Let's compare the annual commissioning of fixed assets with accrued depreciation.

Comparison of input and depreciation of fixed assets at the global level is illegal; in reality, as a rule, their object correspondence is not observed. The commissioning of new capacities is not always carried out precisely in those parts of the national economy where, judging by the accumulated wear and tear, it is primarily necessary. In other words, the processes of capital investment and depreciation do not directly overlap.

So, determining the scale of accumulation of fixed assets by
The comparison between the commissioning of new facilities and depreciation at old production facilities is incorrect. An increase in the share of wear and tear compared to the scale of commissioning of fixed assets cannot indicate an increase in investment costs for replacement, but only reflects an increasing trend in the aging of labor instruments.
Accrued depreciation is only a potential financial resource for compensation, although it is not always spent for its intended purpose.

A comparison of depreciation with the introduction of fixed assets rather characterizes the existing contradiction between their accumulation and reimbursement. This comparison only confirms that in some levels of production extremely worn-out assets, supported by repairs, were accumulated, the further operation of which threatened with disaster, while in others additional capacities were introduced. Thus, there was a polarization of the processes of accumulation and aging of the created production potential.

The simple reproduction of fixed assets should be given priority in investment policy, and the possibilities of production accumulation should be determined on a residual basis, strictly in accordance with that part of the national income resources that society is able to use to expand the created potential. The direction of net capital investment, i.e. expenses from the accumulation fund should be regulated by economic methods in a centralized manner. This is necessary because enterprises are not able to sufficiently fully take into account all future changes in social needs. Depending on the dynamics and structure of the population, prospects for scientific and technological progress, expected restrictions on raw materials and fuel and energy resources, opportunities for cooperation with other regions and other factors, priorities in the distribution of accumulation resources should be determined. With the help of tax and credit policies, these priorities should be implemented .

Thus, a contradictory situation has developed in the national economy with the reproduction of daily funds. Due to the extensive focus of the investment policy, most of the resources were used for many years to accumulate fixed assets. A stable priority was established for new construction, and the reconstruction of existing production was carried out insufficiently. Numerous government regulations have failed to change this trend. The needs of simple reproduction were determined by the residual method, which led to the withdrawal of depreciation funds from enterprises and their use for accumulation. As a result, the production and technical potential has grown to incredible proportions, but it is extremely worn out and ineffective. Old enterprises require high costs to maintain outdated facilities. New industries, created to a large extent at the cost of infringing on the needs of reproduction at old enterprises, cannot develop effectively due to a lack of material and labor resources.

Excessive accumulation, which does not correspond to real possibilities and objective conditions for the functioning of the economy, does not give the expected effect, but causes an increase in losses. There was neither normal use of the created potential nor effective accumulation in the country. Both processes mutually infringed on each other. It is necessary to normalize the process of reimbursing labor and completely transfer it to a market basis, which will allow timely improvement of the created production potential, taking into account the dynamic structure of current demand. This order, along with approaching the structure of needs, should also ensure a significant increase in the efficiency of existing capacities.

The process of production accumulation in the current crisis situation must be strictly controlled by society. To expand production, it is unacceptable to attract either the resources of the consumption fund or the means of compensation. Conditioned by the investment capabilities of society, limited accumulation resources must be centrally regulated and controlled, taking into account future needs.

The main production assets of enterprises undergo an economic cycle consisting of the following stages: wear and tear, depreciation, accumulation of funds for the complete restoration of fixed assets, their replacement through capital investments.

All fixed assets (FPE) objects are subject to physical and moral wear and tear, i.e. under the influence of various factors they lose their properties, become unusable and can no longer perform their functions. Physical wear and tear can be partially offset through repairs, renovations and upgrades. Obsolescence is manifested in the fact that fixed assets in all their characteristics are inferior to the latest models. Therefore, from time to time there is a need to replace fixed assets, especially their active part.
Moreover, in the modern economy, the main factor determining the need for replacement is obsolescence.

Bibliography

1. Gruzinov V.P. and others. Enterprise Economics: a textbook for universities./Ed. V.P. Gruzinova. M.: Banks - exchanges, UNITY, 1998.

2. Zaitsev N.A. Economics of an industrial enterprise. M.: "INFRA - M",
1998.

Sources of financing for the reproduction of fixed assets are divided into own and borrowed.

Reproduction has two forms:

simple reproduction, when the cost of compensating for the depreciation of fixed assets corresponds to the amount of accrued depreciation;

expanded reproduction, when the cost of compensating for the depreciation of fixed assets exceeds the amount of accrued depreciation.

Sources of firms' own funds to finance the reproduction of fixed assets include:

depreciation;

depreciation of intangible assets;

profit remaining at the disposal of the company.

The sufficiency of sources of funds for the reproduction of fixed capital is crucial for the financial condition of the company.

Borrowed sources include:

bank loans;

borrowed funds from other companies;

equity participation in construction;

financing from the budget;

financing from extrabudgetary funds.

If the basis of physical wear and tear is the influence of material factors of the external environment and internal metabolic physical and chemical processes that destroy the materials from which the means of labor are created, then the basis of both forms of obsolescence is scientific and technological progress. It predetermines both the reduction in cost of means of labor and the emergence of new types of equipment and products. In accordance with the nature of the reasons, the loss of use value and the value of means of labor as a result of physical and moral wear and tear occurs differently. If physical wear and tear occurs, as a rule, evenly as fixed assets are used or gradually exposed to the forces of nature, then certain types of means of labor are unevenly affected by obsolescence due to the unevenness of scientific and technological progress. Thus, it has the greatest impact on the active part of fixed assets, since changes in the designs of machinery and equipment are more dynamic compared to the improvement of the designs of buildings and structures. The impact of obsolescence is uneven in different sectors of the national economy. It is especially noticeable in industries that determine scientific and technological progress. The second form of obsolescence has its most significant impact during the first period of introduction of new technology; as innovations become widespread, its impact gradually decreases.

Wear and tear is not the same as wearing out. All created fixed assets, both active and inactive, are subject to wear and tear, regardless of their participation in the production process (production and non-production). Wear is an objectively existing phenomenon. Wear is an economic process, a reflection of wear and tear in economic reality. Wear-out, or economic wear and tear, is the process of loss of value by means of labor. The cause of wear can be both physical and moral wear and tear.

Depreciation is the portion of the cost transferred to the product. Its movement is included in both the production process and the circulation process. The cash depreciation fund is the financial result of the accumulation of successively carried out depreciation charges. It is formed only after the sale of finished products.

Depreciation can be defined as the process of gradually transferring the cost of labor to the cost of finished products. Depreciation deductions are that part of the cost of means of labor that, in each new circulation of enterprise funds, as they wear out, is separated and continues to move as part of the new value, first in the form of work in progress, then as part of the cost of finished products, and after its sale is accumulated in the reserve fund funds intended to reimburse advance costs for fixed assets. Thus, the difference between depreciation and depreciation of fixed assets is clearly outlined. If wear and tear is the loss of use value, and therefore the cost of means of labor, then depreciation means the process of transferring value to the finished product. Both processes, despite their differences, are inseparable as two sides of the same phenomenon. Therefore, depreciation charges, reflecting the amount of transferred value, simultaneously show the degree of depreciation of fixed assets.

Depreciation rates must be structured in such a way as to ensure full reimbursement of advanced investments in fixed assets, regardless of future renovation needs. If, after the period of turnover of fixed assets, the price of a unit of production capacity increases, then additional resources to create new funds to replace retired ones must be found from the national income accumulation fund. Depreciation should not predetermine the possibilities for future development of production.

Simple reproduction of fixed assets refers to measures to maintain them in working condition, ensuring the appropriate technical level of production. This is achieved through the implementation of preventive maintenance system measures, in particular technical inspection, current, medium and major repairs. These types of equipment repairs and maintenance are distributed over time in accordance with the structure of the repair cycle.

The task current repairs is to maintain machinery, equipment, buildings and structures in working condition. During routine repairs, only wear parts of machines and equipment are replaced, minor defects and breakdowns are eliminated.

Medium renovation carried out at intervals of more than one year. The goal is to replace worn-out basic components, assemblies, and structures without completely disassembling the equipment that is being repaired.

At major renovation The equipment is completely disassembled, parts are sorted into usable, unusable and requiring restoration. Assembly units are replaced or repaired, followed by assembly, adjustment and bench testing. As a result of a major overhaul, the technical and operational level of the equipment must be at a level corresponding to the passport values of the indicators.

Major repairs are the most expensive of all types of repairs. Therefore, there is a need to determine the effectiveness of major repairs by comparing options:

the first is a major overhaul of worn-out equipment and continuation of its operation for another repair cycle;

the second is carrying out a major overhaul with simultaneous modernization (improvement) of leading components and assemblies;

the third is the replacement of equipment requiring repair with a new, more advanced model.

Costs for all types of repairs come from two sources. In the first case, by attributing these costs to cost

products of the enterprise with their subsequent inclusion in gross costs. In accordance with the Law of Ukraine “On Taxation of Profits”, an enterprise can make such expenses during the year in an amount not exceeding 5 percent of the book value of fixed assets of the corresponding group at the beginning of the year.

If the costs of repairs exceed the specified amount, then they are financed from other sources with the cost of repairs being allocated to an increase in the book value of the corresponding group of fixed assets. These costs are subsequently subject to amortization.

In order to reduce the costs of repairs of equipment, buildings, and structures, it is necessary to optimize the structure of the repair cycle and the costs of carrying out one repair.

Another form of simple reproduction of fixed assets is the replacement of worn-out equipment with new equipment of the same technical level.

Under the influence of competition, scientific and technological progress, changes in the composition and structure of products for which consumers are in demand, with the expansion of demand for products, enterprises carry out expanded reproduction of fixed assets. Expanded reproduction is the process of updating fixed assets through technical re-equipment, reconstruction, expansion and new construction. As a result, the technical level of production and production capacity of the enterprise increase.

Technical re-equipment of existing production is carried out at the enterprise constantly in order to improve the technical level of individual units, installations, sections and eliminate imbalances in the production capacity of various divisions.

Reconstruction The enterprise produces periodically according to a single project. In this case, complete or partial re-equipment and reorganization of production occurs (without the construction of new ones and the expansion of production areas of existing workshops for the main production purpose). At the same time, it is possible to build new and expand existing auxiliary and service facilities. For example, the commissioning of a new production line requires an increase in the power of a plant-wide transformer. As a result of reconstruction, obsolete and physically worn-out equipment is replaced, the level of mechanization and automation of production is increased, and imbalances in technological units and support services are eliminated. The purpose of reconstruction may be to change the profile of the enterprise, to deepen the diversification of production with the same production areas.

The task of reconstruction may also be the construction of new environmental facilities, reconstruction of engineering systems and communications.

TO expansion of an operating enterprise includes the construction of the second and subsequent stages provided for by the initial project, the construction of additional production complexes and production facilities, as well as the construction of new or expansion of existing workshops for the main production purpose, which may require the expansion of auxiliary and service production and communications.

The processes of reproduction of fixed assets are quantitatively assessed by indicators of condition and movement.

Condition indicators reflect the degree of deterioration of fixed assets. These include:

depreciation coefficient, determined by the ratio of the amount of depreciation to the total cost of cash fixed assets;

fitness coefficient, calculated as the ratio of the residual value of fixed assets to the total value of cash fixed assets at the end of the reporting period.

The movement of fixed assets during the analyzed period is characterized by the following indicators:

receipt ratio, determined by the ratio of the value of newly introduced fixed assets to their value at the end of the year;

renewal ratio - the ratio of the cost of new, technically advanced fixed assets to their value at the end of the reporting period;

fixed asset retirement ratio - the ratio of the value of all retired fixed assets to their value at the beginning of the reporting period;

liquidation ratio, determined by the ratio of the value of liquidated fixed assets to their value at the beginning of the reporting year;

the rate of increase in the value of fixed assets is determined by the ratio of the difference in the value of incoming and retired fixed assets to their value at the beginning of the period.

To assess the nature of reproductive processes at the enterprise

It is advisable to consider the listed indicators in dynamics and not only for the fixed assets of the enterprise as a whole, but also for individual species groups.

The intensity of reproduction processes is also characterized by the turnover time of fixed capital, which is determined by the ratio of the initial cost of fixed assets (replacement) to the annual amount of depreciation.

Reproduction of fixed assets is a continuous process of their renewal. The main goal of PF reproduction is to provide enterprises with fixed assets in their quantitative and qualitative composition, as well as to maintain them in working condition.

In the process of reproduction of the OF, the following tasks are solved:

1) compensation for retiring PF;

2) increasing the mass of the phase preparation in order to expand production volume;

3) improvement of the species, technological and age structure of the PF, i.e. increasing the technical level of production.

There are various forms of simple and expanded reproduction of fixed assets. Forms of simple reproduction– repair, modernization of equipment and replacement of physically worn out and technically obsolete labor tools.

Forms of expanded reproduction fixed assets:

Technical re-equipment (at a qualitatively new level) of an existing enterprise;

Reconstruction and expansion;

New construction.

Forms of restoration (reproduction) of fixed assets are shown in Fig. 2.1.

The costs of repairing and upgrading the operating system are advisable only if the cost of purchasing a new object and losses from under-depreciation of the old one far exceed the costs of repairing and upgrading the operating system.

Based on the volume of complexity, they are divided into current (small), medium, capital and restoration.

Maintenance produced during the operation of the OS without a long interruption in the production process. Replacement of individual parts and assemblies.

Major renovation associated with complete disassembly of the machine, replacement of all worn parts and components. Carried out in accordance with scheduled preventive maintenance schedules. Equipment after a major overhaul must fully comply with its technical characteristics.

If average renovation carried out with a frequency of more than a year, it is close to a major overhaul; with a frequency of less than a year, it is close to a routine repair.

Refurbishment- this is a special type of repair caused by various circumstances: natural disasters, military destruction, long-term inactivity of the PF.

Fig.2.1. Forms of restoration of fixed assets

The costs of all types of repairs are covered by the repair fund. The repair fund is formed through deductions determined on the basis of the book value of the fixed assets and the deduction standards approved by the enterprise. If the company does not create a repair fund, then the costs of repairs are included in fixed costs.

Modernization equipment is its improvement in order to prevent technical and economic aging and increase technical and operational parameters to the level of modern production requirements. It is carried out at the expense of production development funds from the profit of the enterprise.

According to the degree of renewal, a distinction is made between partial and comprehensive modernization (radical alteration). According to the methods and objectives of implementation, modernization is distinguished: typical(massive changes of the same type in serial designs) and target(improvements related to the needs of a specific production).

Depreciation of fixed assets

The fixed assets located at enterprises gradually wear out. There are physical (material) and moral (economic) wear and tear.

Physical deterioration means material wear and tear of fixed production assets under the influence of the labor process or natural forces (abrasion of working parts, corrosion of metal parts and structures, rotting of wooden parts, weathering, etc.).

Physical wear and tear of operating systems occurs during the process of their use or inactivity. What these types of wear have in common is that OSs lose their technical and economic properties over time. The difference lies in the reimbursement process:

1) physical wear and tear of the first type is compensated by transferring the cost of the operating system to the manufactured product;

2) the second type of wear means losses.

The physical wear and tear of the OPF is directly dependent on the load, the quality of care, the level of production organization, the qualifications of workers and other factors.

Physical wear and tear can be determined in two ways.

1. According to the service life of the OS object (volume of work performed):

where I1f is the amount of physical wear, %;

Tf, Tn - actual and standard service life of fixed assets, years;

L - liquidation value of fixed assets as a percentage of book value, %.

2. According to a survey of the technical condition of the OS. In this case, the physical wear of individual structural elements is determined, and then the weighted average percentage of wear for the entire facility is determined:

where I2f is the amount of physical wear of the OS as a percentage during a technical inspection;

fi - cost of the i-th structural element, rub.;

ii - % of physical wear of the i-th structural element;

Fп - initial cost of the fixed asset, rub.

Under obsolescence fixed production assets are understood as their inconsistency with the modern level of technology, reducing the technical and economic feasibility of their operation.

Obsolescence is manifested in the loss of economic efficiency and feasibility of using the OS before the expiration of the period of complete physical wear and tear.

Obsolescence is expressed in two forms:

1) reduction in the cost of operating systems due to a reduction in the costs of their creation due to an increase in productivity in the industries producing these funds. This form of wear and tear is characterized by a partial depreciation of fixed assets in the sphere of their consumption.

Determination of obsolescence of the first form is carried out according to the formula:

where И1м – obsolescence of the first form, %;

Fп - initial cost of the OS, rub.;

Fв - replacement cost of fixed assets, rub.;

2) premature, before the end of the physical service life, depreciation of existing fixed assets due to the commissioning of more productive means of labor. Continuing their use inhibits the growth of labor productivity, and early withdrawal leads to the loss of under-depreciated value.

Obsolescence of the second form is determined using the formula:

where И2м – obsolescence of the second form, %;

Mon, Ps - performance of new and obsolete OS.

The concept of working capital

Working capital – This is the totality of the enterprise’s funds necessary to form and ensure the circulation of production working capital and circulation funds.

Fig 3.1 OBS circuit diagram

Rice. 3.2. Composition and placement of working capital

Based on the areas of turnover, working capital (CCA) is divided into working capital and circulation funds (Fig. 3.2).

Part revolving funds include:

a) production inventories are objects of labor that have not yet entered the production process, but are located at the enterprise in a certain amount, ensuring the continuity of the production process, in the form of warehouse stocks. These include raw materials, auxiliary materials, purchased semi-finished products, fuel, containers, spare parts for equipment repair, as well as household equipment;

b) work in progress - objects of labor that are in production at different stages of processing in departments of the enterprise;

c) semi-finished products of own production - objects of labor, the processing of which is completely completed in one of the divisions of the enterprise, but are subject to further processing in other divisions of the enterprise;

d) future expenses, which include costs for the preparation and development of new products, innovation and invention.

Circulation funds – These are the funds of an enterprise that operate in the sphere of circulation. They do not change their natural material form (unlike working capital). These are funds invested in inventories of finished products, goods shipped but not paid for, as well as funds in settlements and cash in the cash register and accounts.

Funds of circulation are associated with servicing the process of circulation of goods; they do not participate in the formation of value, but are its carriers. After the production of products and their sale, the cost of working capital is reimbursed as part of the proceeds from the sale of products (works, services). This contributes to the constant renewal of the production process, which is carried out through the continuous circulation of enterprise funds. In their movement, working capital passes through three stages: cash, production and commodity.

The relationship between individual groups, elements of working capital and their total volumes, expressed in shares or percentages, is called structure of working capital . It is formed under the influence of a number of factors: the nature and form of organization of production, type of production, duration of the technological cycle, conditions of supply of fuel and raw materials, etc.

According to the scope of standardization, they are divided into:

Standardized OBS;

Non-standardized OBS.

Fixed assets are a set of property of an organization (commodity, other material) used in the creation or production of a product/service. At the same time, the cost of the funds used is transferred to the manufactured products as they wear out.

Fixed assets represent the most important share of all funds owned by an organization. It is they who determine the capacity of its production and technological/technical support, and have a direct impact on output indicators, the cost of goods produced, profitability and profit.

What applies to fixed assets

Basic industrial assets are divided into a number of classes (groups):

structures (roads, tunnels, hydraulic structures, overpasses, bridges, gas wells, oil developments) and buildings (administrative premises and buildings, leading and auxiliary workshops);
transmission devices (pipelines, power transmission devices, oil pipelines);
transport devices (industrial transport, river/sea (industrial) fleet, main pipelines);
mechanisms, machines, equipment, including: workers (rolling mills, presses, blast furnaces, machine tools, hammers) and power (turbines, wind and internal combustion engines, electric motors, transformers);
computing and auxiliary devices (computers, printers, monitors);
equipment and instruments for measurements and regulation (scales, microscopes, pressure gauges);
household equipment (containers, packaging, office equipment);
other instruments of pressing, cutting, impact type;
plantings (perennial);
livestock (worker);
spending on land reclamation;
other.

Equipment, technical devices, tools, instruments, machines and devices are considered fixed assets in their active part if they are directly required during the production process. Other objects (industrial buildings, inventory) are classified as a passive component of the company's funds, since their impact on the process of manufacturing the product is indirect.

Stages of reproduction of fixed assets

Reproduction of fixed assets involves the passage of several interrelated stages:

manufacturing;
application (consumption);
depreciation;
recovery;
replacement (reimbursement).

The initial stage carried out in an organization is purchasing, i.e. acquisition, funds and formation, consisting of several stages for an existing company:

inventory of property aimed at identifying worn-out or obsolete objects;
analysis of existing technological devices (equipment) and the accepted organization of the production process;
determination and selection, taking into account the criteria of certain production specifics, the structure of the funds involved in production, their volume, followed by the further reinstallation of existing equipment, the acquisition and installation of new equipment.

The second stage is characterized by the operation of existing fixed assets in the company, carried out during the production of the product and its sale.

At the production stage, the cost of the objects used is transferred to the cost of the manufactured product, that is, they are depreciated. During the implementation process, the value of funds is converted into monetary form with the accumulation of the latter for subsequent financing of the purchase of new objects or construction.

Under the influence of wear and tear, expressed in physical and moral form, fixed assets that have exhausted their resource are disposed of (disposal), and at the final stage the procedure for their restoration (replacement) takes place, which is carried out in the form of reconstruction and repair, and modernization measures.

FOR YOUR INFORMATION! The last stage represents the beginning of a new cycle of reproduction of funds in the enterprise.

The reproduction process has two options: advanced and simple.

Reproduction of simple fixed assets

The replacement of worn-out/obsolete main objects or their repairs (major, current) are typical for simple reproduction, expressed in the form of certain forms:

repairs, as well as during the entire service life of objects, maintaining them in working condition, carried out in the form of compensation for physical wear and tear (replacement) of some parts;
major repairs or periodic complete disassembly of an object with replacement/restoration of its structural parts, leading to the renewal of funds;
current repair or maintenance of objects used in production in working order by eliminating their damage and breakdowns;
restoration or repairs carried out in relation to funds that have been inactive for a long time or have been exposed to natural disasters (earthquakes, floods).

Expanded reproduction of fixed assets

Reproduction of the expanded type includes procedures related to the modernization of used devices and equipment, technical re-equipment of the enterprise, including through new construction or expansion of existing production facilities.

For new construction means the commissioning of a new enterprise or new production capacity. In this case, fixed assets are purchased taking into account the criteria of technical progress.

When expanding there is the construction of additional production facilities within the existing organization, aimed at creating completely new facilities or additional capacity for the product production process.

During reconstruction and re-equipment the existing active part of fixed assets is subject to modernization, but the expansion of existing buildings or structures is not carried out.

In case of modernization The design of existing funds is subject to changes. The changes being undertaken improve the technical and economic parameters of the facilities, including partially or completely eliminating obsolescence.

FOR YOUR INFORMATION! Modernization is divided into small and complex. The first type takes place simultaneously with major repairs, and the second (more effective) - together with measures to automate and mechanize the production process.

During the modernization of equipment, several areas are being developed:

use of software control when working with equipment;
automation of mechanisms, the functioning of which determines the increase in productivity of the equipment used;
structural modifications and improvements to the mechanisms and machines used, aimed at enhancing their technical capabilities.

Sources of resources for the reproduction of funds

The reproduction procedure is aimed at achieving goals important for the organization:

compensation (reimbursement) of disposed objects (fixed assets);
increasing funds to solve problems associated with increasing the volume of manufactured products;
improving the structure of funds to bring the technical level to the next level.

The enterprise extracts monetary resources for the simple reproduction of fixed assets from its own resources in the form of proceeds from the sale of the product or services produced. Depreciation deductions as expenses to reimburse the cost of repair activities are translated into the cost of sales (product, services).

Repair costs can be reflected in costs by:

attributing actual expenses (repair work) to cost;
creation of a special fund (when attributed to the cost of goods and taken into account as part of other costs);
assigning real expenses to future periods (expenses) when writing off (monthly) production costs.

Expanded reproduction is ensured through various sources in the form of:

capital investments (for the construction of facilities, the purchase of new funds);
loans;
rental or leasing;
transfer of (free) resources;
costs for the company's authorized capital (long-term).

The continuity and consistency of the reproduction of funds in the company ensures the efficiency of their use and maintenance of the production process at the required level.