For successful functioning to the enterprise of different resources, including: money, equipment, etc. These resources are also called as enterprise assets. In other words, enterprise assets are its resources having value terms. The balance shows the size of means a for a certain date.
The book cost of means of production reflects, what share of their initial cost is kept. Therefore, the statement that book cost reflects the market value of means, is wrong.
The acquired intangible asset can be removed at once from reports by write-off it at the expense of reserves. When using this method the acquired cost of goodwill receives the same status, as already existing business reputation of the company.
Means represent resources, the companies A. And though employees of this company,, its most valuable resource, nevertheless, they are not the resource which is subject to accounting.
When forecasting service life of means in attention both possible physical, and wear. Thus as service life smaller of two sizes. Let's assume that the term of physical wear of means makes 10 years, and the expected obsolescence term — 5 years. Thus the expected service life of these means will make 5 years.
The earth, with rare exception, keeps the usefulness during the uncertain period of time. Therefore, according to the principle of prime cost, in balance of the enterprise the earth is shown at the cost of its acquisition.
Due to the aforesaid annual decrease in a of funds for the same size is called as method of rectilinear depreciation. The majority of the companies uses this method in practice.
The enterprise possesses the most part to them means. If the enterprise rents the building, the equipment or other tangible means, these means belong not to the enterprise, and the lessor. Therefore the means rented by the enterprise do not to its own means.
The additional resources received by the company as a result of revaluation of funds in case objects of fixed capital are estimated above the balance cost. For example, it belongs to the earth and property acquired a few years ago and which rose in price owing to an increase in prices for real estate. If the company decides to increase the cost of the assets, it has to be made so:
When the enterprise gets the means having long service life (i.e. the main of means, the cost of these means is considered in prime cost of the realized production by its distribution to all term of useful service. For example, if any machine is got for 10,000.. and the expected term of its operation of 5 years (it is supposed that for the end of this period its value will be equal to zero), these 10,000.. it is necessary to subtract from profit within all 5 years. This procedure is called as depreciation charge.
— Investments in securities and stocks of other companies usually raise in the price. However if their market value falls below nominal, they have to be overestimated towards reduction of cost if it is supposed that their new cost will be a constant.
Now there are no official of accounting of intangible assets. Nevertheless, the rule of conservatism in accounting demands that were present at balance of the company those intangible assets which were acquired on the party and which cost can be exact an. For such assets the of term of useful service then they with time will gradually be amortized is defined (that is their decreases). However some companies the intangible assets which are not corresponding to the above-named criteria in the balances.
When on the main means depreciation is charged (as costs in the report on profit and losses), the cost of this main means shown in the reporting of the company for the sum of the added depreciation. The size received as a result is called as net residual value and represents the cost of this main means minus the total amount of the wear added at the moment. Therefore, communication between the depreciation subtracted from profit, and the residual cost of means shown in balance.
Since that moment as at the enterprise intangible means are considered along with tangible means, their cost is subject to write-off during service life (but not more long, than within 40 years). Such process is called as depreciation of intangible means. Thus, the of intangible means — is process of write-off of their cost.