Ministry of Justice of Ukraine
May 18, 2000
of April 27, 2000 No. 92
About approval of the National provision (standard) of the financial accounting 7 "Fixed assets"
In pursuance of the Program of reforming of the system of financial accounting using international standards approved by the resolution of the Cabinet of Ministers of Ukraine of October 28, 1998 No. 1706, and decisions of Government committee of economic development of March 3, 2000 No. 2/3 of PRIKAZYVAYU:
1. Approve the National provision (standard) of the financial accounting 7 "Fixed assets" (further - the Provision (standard) 7) approved by Methodological council on financial accounting under the Ministry of Finance of Ukraine which is applied.
2. Determine that:
2.2. Other regulations of the Ministry of Finance of Ukraine on financial accounting are effective in part which does not contradict the National provision (standard) 7.
3. Recognize such what since July 1, 2000 voids, the order of the Ministry of Finance of Ukraine of July 24, 1997 as No. 159 "About approval of the Instruction for financial accounting of book value of groups of fixed assets", No. 310/2114, registered in the Ministry of Justice of Ukraine on August 14, 1997 with changes and amendments.
V. V. Reguretsky
Approved by the Order of the Ministry of Finance of Ukraine of April 27, 2000 No. 92
1. National provision (standard) of the financial accounting 7 "Fixed assets" (further - the National provision (standard) 7) determines methodological bases of forming in financial accounting of information on fixed assets, other non-current tangible assets and incomplete capital investments in non-current tangible assets (daleeosnovny means), and also disclosures of information on them in the financial reporting.
2. Regulations of the National provision (standard) 7 are applied by the companies, the organizations and other legal entities (further - the companies) all patterns of ownership (except budgetary institutions and the companies which according to the legislation constitute the financial reporting under International Financial Reporting Standards).
3. The national provision (standard) 7 does not extend on:
3.1. Transactions with the biological assets connected with agricultural activities and estimated at fair value, reduced by the expected expenses on the place of sale which features of accounting are determined by other provisions (standards) of financial accounting.
3.2. Non-reproducible natural resources which features of accounting are determined by other provisions (standards) of financial accounting.
3.3. Fixed assets which keep with sales objective which features of accounting are determined by other provisions (standards) of financial accounting.
3.4. The investment real estate which features of accounting are determined by other provisions (standards) of financial accounting.
4. The terms provided in provisions (standards) of financial accounting have such value:
Depreciation - systematic distribution of cost which will be amortized, non-current assets during the term of their useful use (operation).
The cost which will be amortized, - primary or revaluated value of non-current assets less their salvage value.
Group of fixed assets - set same on technical characteristics, appointment and conditions of use of non-current tangible assets.
Usefulness reduction - loss of economic benefit in the amount of excess of residual cost of asset over the amount of the expected compensation.
Depreciation of fixed assets - depreciation amount of fixed asset object since the beginning of its useful use.
Salvage value - the amount of means or cost of other assets which the company expects to receive from realization (liquidation) of non-current assets after the termination of term of their useful use (operation), less the expenses connected with sale (liquidation).
Fixed assets - tangible assets which the company holds for the purpose of use them in production process or deliveries of goods, provision of services, leasing to other persons or for implementation of administrative and welfare functions which expected useful life (operation) is more than one year (or operating cycle if it is longer than year).
The fixed asset object is: the finished device with all devices and belongings to it; structurally isolated subject intended for accomplishment of certain independent functions; the isolated complex of structurally integrated objects identical or of different function, having general devices, accessories, management and the single base for their servicing owing to what each subject can perform the functions, and complex - certain work only as a part of complex, but not independently; other asset which corresponds to determination of fixed assets, or part of such asset which is controlled by the company.
If one fixed asset object consists of parts which have various useful life (operation), then each of these parts can be recognized financial accounting as separate fixed asset object.
Similar (uniform) objects - objects which have identical functional purpose and identical fair value.
Primary cost - historical (actual) cost of non-current assets in cash amount or fair value of other assets, the paid non-current assets (transferred), spent for acquisition (creation).
Revaluated value - the cost of non-current assets after their revaluation.
The useful life (operation) - the expected period of time during which non-current assets will be used by the company or with their use will be made products amount (works, services) expected by the company (is executed).
The amount of the expected compensation of non-current asset - the greatest of two estimates: net value of realization or this cost of future net cash receipts from use of non-current asset, including its salvage value.
Capital investments into non-current tangible assets - construction expenses, reconstruction, upgrade (other improvements increasing original (overpriced) cost), production, acquisition of objects of tangible non-current assets (including the non-current tangible assets intended for replacement acting, and the equipment for installation) which are performed by the company.
Net value of realization of non-current asset - fair value of non-current asset less the expected expenses on its realization.
Residual cost - difference between the original (overpriced) cost of non-current asset and the amount of its accumulated depreciation (depreciation).
Fair value - the amount on which it is possible to sell asset or to pay obligations in usual conditions for certain date.
Recognition and assessment of fixed assets
5.1. Fixed assets
5.1.1. Parcels of land.
5.1.2. The capital expenditures on improvement of lands which are not connected with construction.
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