What are the main assets of the enterprise?
The role of fixed assets in the enterprise
Business organization and management is very difficult. Therefore, it is very important to understand all the details of this process. An important part of the enterprise’s activity is a proper understanding of what the company's fixed assets are and how they participate in the business process.
How is the use of fixed assets in the enterprise
What is the difference between fixed assets of an enterprise and other assets? First of all, they are distinguished by the fact that in the production process they are not spent completely, but gradually transfer their value to the final product produced by the enterprise. Let's take as an example a certain machine on which parts are processed. A great many of them can be processed on it, but sooner or later a moment will come when he will cease his work, while the enterprise will continue to function.The reasons for the failure of the machine to work can be two. One of them is that it can simply break, and so that it can no longer be repaired. The second reason is obsolescence. Over the years of operation, a similar machine can go on sale, but at the same time it has a much higher productivity. It may be beneficial to abandon the old equipment and buy new. Obsolescence may have a different nature. For example, there may be higher sanitary requirements for working on this machine. Sooner or later there will come a time when it will be necessary to buy something new in place of the former object of fixed assets. Where does the company get the money from? After all, such purchases are expensive. There are two main ways to do this. During operation, depreciation is charged on each fixed asset. That is, it is consumed in parts, in accordance with the norms, for a certain period of time. Depreciation is charged in such a way that the useful life coincides with the length of time during which it depletes the original cost of this equipment.At the expense of depreciation, the company saves money to replace the fixed assets of the enterprise. The second way (complementary to the first) is to take advantage of credit opportunities for such purchases. Among them, the use of leasing is popular.
It should be noted that the fixed assets of an enterprise may by their very nature be quite different from each other. They can be divided according to several criteria. It can be own fixed assets or rented. They can be in operation, in reserve or on conservation. They can also be active or passive. The latter may include land, buildings, various technical installations or transfer devices (for example, a pipeline). The first includes machine tools, transportation, communications, computer equipment, software, furniture and similar equipment.