THE MAIN METHODS OF PROPERTY VALUATION
Having started your own business, you will quickly realize that registration of an LLC is just the beginning of the journey, and not very difficult. Each company is obliged to form its accounting policy in relation to the methods of valuing its own property and liabilities. These data are reflected in the financial statements (expressed in monetary terms). So:
If the property is purchased for a cash payment, then the costs of its purchase are summed up;
The property received by donation is valued at the market value at the time of the transfer for use;
If the property is a product of the company – at its cost;
Regardless of the intensity of economic activity, amortization of the means of production and intangible assets is counted;
All transactions made in the currency of other countries are converted into the ruble equivalent valid at the time of the transaction.
If the transaction was concluded under an exchange agreement – barter, then the price of assets is determined on the basis of the value of similar values.
The material value of the reserves remaining as a result of the liquidation of the property is determined, as in most cases: the current market value plus payment for delivery and operational status. Based on these parameters, the order of determining the price is indicated.
The company can take into account the forms of strict accountability, placed on off-balance sheet accounts not only on the basis of their formulas 1 form = 1 ruble, but also at cost. Enough to fix this position in the accounting policies of the institution.
Other assessment methods may be applied, for example, reservation. It depends on whether a specific case is provided for by the legislation of the Russian Federation.
Check for find out more: http://www.wcvaluers.com.au/
These objects are valued at their actual cost – the amount directly paid for them, plus the amount for manufacturing including VAT, which were submitted by suppliers and contractors.
Inventories can be estimated at their direct cost or at the cost of the cost of their manufacture.
Non-productive assets: at market value – for newly acquired assets, and for already used – real investments of the organization in them.
In determining the market value of a non-financial asset, the following are used:
Price information for similar items received from manufacturers in writing;
Information about prices obtained in trade inspections, in state statistical bodies, in the media;
At the same time, general business expenses are not investments of the company in the acquisition of non-financial assets. The exceptions are the cost of purchasing or manufacturing an object.
What are general business expenses?
- Administrative expenses;
- The maintenance of non-production personnel;
- Depreciation and expenses for the repair of managerial and general-purpose funds;
- Rent for general premises;
- Payment for the provision of information, consulting, etc. services.
The monetary valuation of the property and liabilities of the organization is obligatory, the purpose of such valuation is determined for their reflection in the accounting records and financial statements in monetary terms, the methods of property valuation are determined.
Assessment of the organization’s property is carried out in the following ways:
1) The property acquired by the organization for a fee is estimated by summing the actual expenses incurred for its purchase;
2) The property received by the organization without compensation is valued at the market value on the date of posting;
3) Property produced in the organization itself is valued at the cost of its manufacture.
Other valuation methods (including by way of reservation) can be applied only in cases when it is allowed by the legislation of the Russian Federation and the regulatory acts of the bodies that regulate accounting.
Methods for assessing types of property and liabilities are approved when an organization adopts an accounting policy.
For accounting purposes, depreciation of fixed assets and intangible assets is made regardless of the results of the organization’s business activities in the reporting period.
Fixed assets are accepted for accounting at historical cost. The initial value of fixed assets acquired for a fee is the sum of the actual expenses of the organization for the purchase, construction and manufacture, with the exception of VAT and other recoverable taxes.