Methodological approaches to evaluation and revaluation of fixed assets in the context of implementing international accounting standards
Date
2019-02-28
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Видавництво Львівської політехніки
Lviv Politechnic Publishing House
Lviv Politechnic Publishing House
Abstract
It has been established that the issues
of methodological nature are of key importance in
ensuring the reproduction process of the elements of
material and technical resources, among which the issues
of applied significance should be emphasized, such as
justification of criteria and indices which can be
indicators of the reproduction process state; developing
algorithm of the latter at its various stages; modeling
reproduction processes at the enterprise. Considering the
issues of developing objective criteria and indices for the
evaluation of the reproduction process of the elements of
material and technical resources at the agricultural
enterprises, the first thing to be noted is an unresolved
issue of fair value, which creates the situation wherein
book value of fixed assets and other assets minimizes the
investors’ possibilities to protect their interests. This is
due to the fact that accounting in Ukraine serves for tax
control rather than management and investment.
Evaluation of fixed assets, being the components of
material and technical resources (MTR), at fair value
makes it possible to characterize the reproduction process
objectively, define the property status of the economic
entity more precisely. However, it distorts financial
result. We believe that simultaneous use of several
indices for fair value measurement may lead to different
fair values of the fixed asset. An agricultural enterprise is
obliged to analyze the reasons for inconsistencies in
calculations and choose the most precise estimation of the
fair value. Fair value of the assets must reflect variability
of money flows, which are taken into consideration
during price negotiation by independent, knowledgeable
buyers and sellers interested in making such a deal. There
is no unified approach due to the fact that most of the
assets do not have market value, and their fair value
estimated by the expert is conditional and fair only as of
the estimation date. Nevertheless, fair value is necessary
for the potential investors and indispensable to financial
assets. Evaluation methods of fixed assets at their fair
value require development, adjustment of evaluation
model, which will make it possible to ensure equivalency
of exchange between the independent parties on the active market.
Description
Keywords
evaluation, revaluation, fixed assets, agricultural enterprise, international accounting standards, national accounting standards
Citation
Svynous I. Methodological approaches to evaluation and revaluation of fixed assets in the context of implementing international accounting standards / I. Svynous, T. Shepel, N. Lytvynenko // Economics, Entrepreneurship, Management. — Lviv : Lviv Politechnic Publishing House, 2019. — Vol 6. — No 2. — P. 89–99.