IAS 16

Fixed assets - material objects that ^[4] :

• are intended for use in the production or supply of goods and services, for renting out to third parties, or for administrative purposes,
• are intended to be used for more than one period.

The cost of a fixed asset is recognized as an asset if:

• there is a reasonable probability of obtaining economic benefits, and
• The cost of an asset can be measured reliably.

Spare parts and service parts are recognized ^[5] :

• stocks and are written off in the statement of profit and loss as consumed,
• fixed assets when used for more than one period,
• fixed assets when used only in connection with the operation of another fixed asset.

Property, plant and equipment are valued at historical cost , that is, at the amount of paid cash or cash equivalents and at the fair value of another counter-consideration transferred to acquire the asset at the time of its acquisition or construction.

Fair value is an amount for which an asset can be exchanged when a transaction is made between well-informed, willing to make such a transaction and parties independent of each other.

The initial value of the asset includes ^[6] :

• the purchase price, including duties and non-refundable taxes minus trade discounts and refunds,
• the costs directly attributable to the delivery of the asset and bringing it to a state that ensures its operation in accordance with the intentions of the company's management,
• an initial assessment of the cost of dismantling and removing a fixed asset and the restoration of natural resources in the area it occupies, the obligation for which the company assumes either when it acquires this facility or because it has been operating for a certain period of time,
• the cost of employee benefits and professional services arising in connection with the construction or acquisition of fixed assets,
• site preparation costs
• Primary costs of delivery and unloading, installation and assembly,
• costs of testing proper asset performance,
• borrowing costs in accordance with IAS 23 “Borrowing Costs”.

Costs not attributable to fixed assets ^[7] :

• the cost of opening a new production or technical facility,
• the cost of introducing a new product or services (including the cost of advertising and product promotion),
• the cost of doing business in a new place or with a new category of customers (including the cost of training and personnel training),
• administrative and other general overhead costs
• repair and routine maintenance,
• excessive losses of raw materials, labor and other resources incurred in creating an asset on its own,
• the internal profit of the self-created asset
• the difference between the price and the total amount of the payment when the payment is deferred is the percentage of crediting.

The initial value of the asset received by the exchange for a non-monetary (non-monetary) asset (assets) is measured at fair value , except when:

• exchange operation has no commercial content,
• The fair value of neither the asset received nor the transferred asset cannot be reliably measured.

The accounting policy selects the model for the subsequent accounting of fixed assets and applies to the entire class of fixed assets:

• at cost less accumulated depreciation and accumulated impairment losses,
• at a revalued amount equal to the fair value at the date of the revaluation less any accumulated depreciation and impairment losses.

Revaluation is made in the cases of ^[6] :

• changes in the fair value of fixed assets
• The significant difference between the fair value of an asset and its book value.
• revaluation of an individual object (entails the revaluation of the entire class of the fixed asset).

Classes of fixed assets ^[6] :

• land,
• land and buildings
• cars and equipment,
• water craft
• aircraft,
• motor vehicles
• furniture and built-in elements of engineering equipment,
• office equipment.

If the book value of an asset increases as a result of a revaluation surplus, the increase is reflected in equity (“Revaluation reserve”). The increase is recognized in the financial result of the period to the extent that it reverses the loss on revaluation of the same asset previously recognized in the statement of comprehensive income. When the carrying amount of an asset decreases as a result of a markdown, the decrease is recognized in the financial result of the period. The revaluation loss is debited to the “Revaluation reserve” in equity if there is any credit balance in the increment of revaluation in respect of the same asset. The revaluation reserve is closed to retained earnings (NPF) during the useful life of the asset. The amount transferred from the revaluation reserve to the NPF account for the reporting period is the difference between the depreciation calculated on the basis of the revalued asset's book value and the depreciation calculated on the basis of its initial value. When the asset is derecognised, the revaluation reserve is transferred to retained earnings. The transfer is carried out on the article NPP, bypassing the financial results of the period ^[6] .

After the revaluation of the asset, any depreciation accumulated at the date of the revaluation is taken into account ^[6] :

• indexation method: is revalued in proportion to the change in the gross book value of the asset so that, after revaluation, the book value of the asset is equal to its revaluation
• a write-off method: is eliminated against the gross book value, and the net amount is recalculated to the revalued amount of the asset.

Depreciation is the systematic allocation of the depreciable value of an asset over its useful life.

Amortized cost is the initial cost of an asset or other amount reflected instead of the initial cost, less its residual value.

The liquidation value of an asset is the estimated amount that an organization would currently receive from the sale of an asset minus its estimated disposal costs if the asset had already reached the age and condition in which, as might be expected, it will be at the end of its useful life. .

Service life is the period of time during which the organization expects to use an asset, or the number of production units or similar units that a company expects to receive from the use of an asset.

Land plots have an unlimited useful life and are not subject to depreciation. If the cost of a plot of land includes the cost of dismantling, removing an object, and restoring natural resources in this plot, then this part of the land is depreciated over the period of receipt of benefits from incurring such costs ^[6] :

Methods of depreciation ^[6] :

• Equal accrual - the accrual of the fixed amount of depreciation over the useful life of the asset, without changing the liquidation service
• declining balance - reducing the amount of depreciation over the useful life
• production - depreciation on the basis of the intended use or the proposed activity

Depreciation of an asset begins when the asset is available for use, that is, the location and condition of the asset ensures its use in accordance with the company's intention. Depreciation of an asset ceases with derecognition. Depreciation does not stop if the asset is idle or taken out of service due to its subsequent sale. using the asset's depreciation method - depreciation charges are zero as long as the asset produces nothing.

Depreciation charges for each period are recognized in the profit and loss of the period, unless they are included in the carrying amount of another asset.

Each component of an asset, the initial cost of which is significant in comparison with the total value of the object, is depreciated separately.

To determine the reduction in the value of a fixed asset, IAS 36 “Impairment of Assets” is applied, which regulates the accounting for impairment losses.

Recognition of the carrying value of a fixed asset is subject to termination ^[6] :

• upon leaving,
• when no future economic benefits are expected from its operation or disposal.

Profit or loss arising from the derecognition of an item of property, plant and equipment is defined as the difference between the net disposal proceeds and the carrying amount of the item.

The financial statements disclose the following information ^[6] :

• ways to estimate book value before depreciation,
• depreciation methods used
• useful lives and depreciation rates
• book value before depreciation and accumulated depreciation (together with the accumulated impairment loss) at the beginning and at the end of the period,
• reconciliation of book value at the beginning and at the end of the period,
• the presence and degree of restrictions on property rights and the value of fixed assets pledged as collateral to secure liabilities,
• the amount of costs recognized in the book value, the fixed asset during its construction,
• the amount of contractual obligations for the acquisition of fixed assets
• the amount of compensation provided by third parties in connection with the depreciation, loss or transfer of fixed assets,
• the date on which the revaluation was made,
• participation of an independent appraiser,
• the methods and significant assumptions used in calculating the fair value of the objects,
• for each revalued class of fixed assets, the carrying amount that would be recognized if the assets were recorded at historical cost,
• a revaluation gain indicating changes for the period and any restrictions on the distribution of the balance among shareholders.