How To Confirm Fixed Assets

In practice, financial personnel often have doubts when confirming fixed assets, such as buying.

Fixed assets refer to tangible features with the following characteristics.

1. (held for the purpose of producing goods, providing services, leasing or operating management);

2. the useful life is more than one accounting year.

Be careful:

(1) the purpose of holding assets is different, and the classification may be different. For example, housing for general enterprises is mostly used for production and operation, belonging to fixed assets, but for real estate enterprises will be sold for commercial housing.

(2) "lease" is limited to the rental of machinery and equipment for leasing; if it is leased by means of financial leasing, it will not belong to the lessor's assets in the lease term; if it is rental housing and buildings, it should generally invest in real estate.

(3) the service life can also be expressed by the quantity of products or services provided by the fixed assets.

(4) it must be tangible assets to distinguish between intangible assets.

In addition, the current enterprise accounting standards no longer emphasize the "unit value standard", because the unified unit value standard does not apply to all enterprises.

Of course, in practice, enterprises should make use of professional judgment and take into consideration unit value standards, so as to distinguish low value consumables from fixed assets.

If the fixed assets meet the following conditions at the same time, it can be confirmed:

The economic benefits related to the fixed assets are likely to flow into enterprises.

2. The cost of the fixed assets can be measured reliably.

Note: "reliable measurement" can also be based on reasonable estimates in some cases. For example, fixed assets that have reached a predetermined applicable state but have not gone through the completion formalities should be accounted for on a provisional basis, that is, their cost can be measured reliably and depreciated.