DEPRECIATION POLICY OF THE ENTERPRISES: ACCOUNTING OF FACTORS IN CASE OF THE METHOD CHOICE
Journal Title: Економіка: реалії часу - Year 2016, Vol 4, Issue 26
Abstract
Depreciation charges are a source of simple reproduction of fixed assets, contributing to the technical and technological enterprises development, and with the possible accumulation of financial resources in excess of a simple upgrade, can become a source of investment programs. The research allowed to identifying a number of issues faced by companies in the development of the depreciation policy. These aspects included: choice of method of depreciation calculation, the establishment of the useful life of fixed assets and the factors affecting the formation of the amortisation enterprises policy. The studies identified: Rating methods for calculating depreciation, depending on the rate of reimbursement of fixed assets; cash flows and their assessment carried out on the basis of NPV; factors influencing the choice of method for calculating depreciation and presented their assessment. Conducted analytical steps possible to identify the main principles that should be taken into account in the formation of the depreciation enterprise policy: installation of the useful life of a particular item of property; the choice of method of depreciation calculation; creating conditions and procedure for revaluation of fixed assets; the ability to optimize the process of capitalisation of depreciation - as a source of reproduction of fixed assets; the conditions of use of capitalisation and savings due to depreciation. Establishing the use of the useful life of a particular item of property, and choice of method of calculating depreciation should take into account factors that affect: the intensity of use of fixed assets; economic benefits now from a particular fixed asset. The most influencing factors on the formation of the amortisation enterprises policy are: the level of development of scientific and technological progress; technical and organisational level, plant and equipment; range of products (work performed, services rendered); capitalisation of depreciation.
Authors and Affiliations
Valentyna Saadzhan
Keywords
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