The fixed assets’ optimal service life evaluation towards the process of their innovative renewal

Abstract

Досліджено підходи до визначення оптимальних термінів служби основних виробничих засобів промислових підприємств як головного параметра у процесі їх інноваційного оновлення. Розроблено метод визначення оптимальних термінів використання основних засобів (ОЗ) з вико- ристанням рівнянь та дисконтованих грошових потоків. Проаналізовано, як впливають різні терміни використання основних засобів на інвестиційне забезпечення процесу їх оновлення. Теоретичні висновки обґрунтовано кількісними розрахунками.

Purpose. The efficiency of the enterprise’s financial and economic activity is largely determined by the availability of the necessary production potential, the main component of which is fixed assets (FA). Currently, Ukrainian enterprises are characterized by a high level of FA’s wear and tear, which is the leading factor of low production efficiency. The current situation explains the need for significant changes in the area of updating the fixed assets, and necessitates the development of new methodological approaches and relevant practical recommendations. In this connection, the problem of choosing the process of reproduction of fixed assets and determining the expediency of carrying out these measures becomes especially relevant. At the same time, the terms of use of fixed assets are the main parameter in the process of their innovative renewal, in connection with which the problem of quantitative assessment of the optimal terms of operation of the equipment arises. The purpose of the article is to investigate and substantiate the concept of the optimal period of use of fixed assets, as well as to analyze how deviations from this period affect the investment support of the process of innovative renewal of the FA by constructing relevant equations with discounting of cash flows. Design/methodology/approach. The article uses the cash flow discounting method, iterative and balance methods to calculate the optimal service life of the FA and to analyze the impact of deviations from these terms on investment support for the innovative renewal of fixed assets. The obtained calculation results are visually displayed using tables and a graphic method. Findings. The article examines several methods for determining the optimal service life of the fixed production assets of enterprises and the moment of their reproduction. Three main approaches to management decision-making regarding the expediency of updating FA are identified and studied: cost-effective, profitable, and comparative. The main methods and criteria for choosing the moment of replacement of existing FA with new ones were considered, and their advantages and disadvantages were evaluated. The author proposes and substantiates an approach to determining the optimal service life of the FA based on the use of equations with cash flow discounting. Corresponding numerical calculations are given. The influence of the deviation from the optimal FA’ operation period on the investment support for their innovative renewal was also assessed. Practical implications. The methodical and practical results obtained in the research process can be used to calculate the optimal service life of existing main production assets and the rational moment of their replacement with new ones, as well as in the development of the company’s depreciation policy. Originality/value. The quantitative assessment of the equipment’s terms of use and its influence on the process of their renewal is important, since too long a period of use of fixed assets does not allow the timely introduction of new, more progressive types of equipment. At the same time, the significant shortening of the service life of the FA (with the same rate of depreciation) does not allow to accumulate the appropriate funds for renewal.