FEATURES OF RECOGNITION AND ACCOUNTING FOR LOW-VALUE ASSETS

Abstract

The article is devoted to the issues of accounting for low-value assets, particularly their reflection on current and non-current assets of the enterprise according to the relevant recognition criteria. Since each enterprise uses in their economic activity such means of labor have a short period of use and a relatively low price, there is a need to determine all of the criteria by which low-value assets can be classified as low-value non-current tangible assets or low-value fast-wearing items. A low-value assets are an assets with a special purpose to support the implementation of operations at the enterprise. Such assets have different material forms, and from the accounting side can be divided into two categories: low-value fast-wearing items and low-value non-current tangible assets. Due to the duality of the economic content of such assets, there is a special methodology for accounting in the practical activities of business entities. However, the lack of developed methodology has a negative impact on the construction of an asset accounting system at enterprises. The issue of criteria for recognition of such assets, in particular, the terms of useful life or their cost limit is important. It is a controversial issue - The definition of different assets by the same term «low-value assets»: those that are classified as current and those that are non-current. Therefore, it is proposed to determine such assets not by the period of use but by its place in the enterprise financial statements (i.e. whether it is significant enough to be reflected in the financial reports). Thus, the studies are relevant from the viewpoint of forming criteria for recognizing low-value assets and assigning them to the appropriate group. The authors of the article define the criteria for comparing low-value non-current tangible assets and low-value fast-wearing items: useful life, cost limit, depreciation calculation, recognition of expenses, asset accounting after acquisition and commencement of use, assignment of inventory number, and reflection in the financial reports. The application of these criteria leads to a more accurate determination of asset compliance with the signs of current or non-current.