JEL Classification: D24; M41.
Pylypenko Liubomyr, Doctor of Economics, Professor of Department of Accounting and Analysis, Lviv Polytechnic National University, Lviv, Ukraine
ORCID ID: 0000-0003-4306-7531
e-mail: lpylypenko@ukr.net
Tyvonchuk Olena, Candidate of Economic Sciences, Associate Professor of Department of Accounting and Analysis, Lviv Polytechnic National University, Lviv, Ukraine
ORCID ID: 0000-0001-5524-6516
e-mail: patronk@meta.ua
Conceptual and methodological approaches for the enterprise and the state depreciation policy formulation
Abstract. Introduction. Depreciation policy remains to be an important element of financial and the enterprises accounting policies of the economic regulation system by the public authorities. However, the development of post-industrial economy, which has caused a change in economic conditions of the enterprises functioning, in particular in the structure of non-current assets and the terms of their use due to the possible obsolescence, necessitates the further development of depreciation methods.
Purpose. The purpose of the paper is to study the conceptual and methodological approaches to the formation of depreciation policy of the enterprises and the State in the conditions of post-industrial economy.
Results. On the base of the proven relationship between the functions and the concepts of depreciation, it was substantiated that today depreciation performs the fiscal, distributive functions and the function of capital maintenance at the enterprise level, as well as regulatory and fiscal functions at the state level. The main objectives of national depreciation policy were determined, their mutual inconsistency was established. The characteristic of the elements of enterprises depreciation policy was given; its main tasks were defined. Empirical and graphic analysis of influence of fixed assets useful life on the intensity of their depreciation was carried out, as a result of which the depreciation methods, leading to the largest and lowest intensity of the object’s depreciation, were determined.
Conclusions. The national depreciation policy should be directed at the formation of methodological tools for protecting capital from the phenomenon of moral aging, as well as for preventing the overestimation of the cost and prices in social and public interest areas of economic activity.
The enterprise depreciation policy as an element of its accounting policy should determine the procedure for establishing the periods of depreciation (useful use) of non-current assets, methods of computing, the technique of accumulated depreciation revaluation, the order of writing off for expenses broken down by the objects, etc. This policy could be one of the financial and accounting tools for protecting enterprises’ capital from the phenomenon of equipment and technology moral aging. By determining the depreciation period and methods of computing, the enterprise management team can regulate the rate of charging the value of non-current assets to expenses. However, such protection mechanism against obsolescence is insufficient. Thus, one of the further research directions is substantiation of the methodology and detailed elaboration of the procedure for creating a reserve for the moral (technological) depreciation of fixed capital.
Keywords: amortization; depreciation; obsolescence; depreciation policy; depreciation concepts.
References:
- Baetge, J. (2000). Balansovedeniye [Bilanzen], transl. from German, Bukhgalterskiy uchet, Moscow, Russia.
- Golov, S. F. (2004). The concepts of depreciation and their influence on accounting and management in modern conditions. Accounting and Audit, no. 8, pp. 9-15.
- Zagorodniy, A. G. and Vozniuk, G. L. (2011). Finansovo-ekonomichnyi slovnyk [Financial and economic dictionary], 3rd edition, Lviv Polytechnic Publishing House, Lviv, Ukraine.
- Sokolov, Ya. V. (1996). Bukhgalterskiy uchet: ot istokov do nashikh dney [Accounting: from the sources to the present], Audit, UNITI, Moscow, Russia.
- Trachova, D. N. (2018). The place of depreciation in economic and accounting theories. Scientific Journal of Kherson State Series “Economic Sciences”, iss. 28, p. 2, pp. 163-166.
- Yaremko, I. Ya. (2003). Znos i amortyzatsiia neoborotnykh aktyviv – instrument otsinky kapitalu pidpryiemstva [Depreciation and amortization of non-current assets – a tool for assessing the capital of an enterprise], Novyi svit, Lviv, Ukraine.
- Kadatska, A. M. (2016). Economic content and functions of fixed assets depreciation. Hlobalni ta natsionalni problemy ekonomiky, no. 13, pp. 572-575.
- Pivniak, Yu. V. (2013). Research of the basic concepts and functions of depreciation. Naukovyi visnyk: Finansy, banky, investytsii, no. 2, pp. 135-138.
- Pryimak, N. S. (2009). Depreciation and its functions in the economic activity of the enterprise. Scientific works of KNTU. Economic sciences, vol. 16, p. 1, pp. 194-201.
- Pylypenko, L. M. (2016). Rozvytok kontseptsii pobudovy systemy publichnoi zvitnosti korporatsii v umovakh postindustrialnoi ekonomiky [Development of the concepts of corporate reporting system formation in post-industrial economy], Lviv Polytechnic Publishing House, Lviv, Ukraine.
- Ministry of Finance of Ukraine (2004). Regulation (Standard) of Accounting 28 “Impairment of assets”, available at: http:// http://zakon5.rada.gov.ua/laws/show/z0035-05 (Accessed 24 June 2018).
- Pylypenko, L. M. (2011). Intensity of depreciation of fixed assets of the enterprise using different methods of its calculating. Proc. IX-th Int. Conf. “Development of accounting, analysis and audit system in Ukraine: theory, methodology, organization”, Business Media Consulting, Kyiv, pp. 99-106.
- Asmolova, A. B. (2007). Mechanisms and concepts of depreciation policy in Ukraine and abroad. Humanities Bulletin of ZSEA, no. 28, pp. 217-228.
- Duchynska, N. I. (2005). Research on the economic nature of depreciation. Economic Messenger of the NMU, no. 4, pp. 61-66.
- Kuter, M. I., Kuznetsov, A. V. and Mamedov, R. I. (2008). Modern view on the concepts of depreciation. Ekonomycheskyi analyz: teoryia i praktyka, no. 24 (129), pp. 2-11.
- Medvedev, M. Y. (2001). Obshchaya teoriya ucheta: estestvennyy. bukhgalterskiy i kompyuternyy metody [General theory of accounting: natural, accounting and computer methods], Delo i Servis, Moscow, Russia.
- Oshmarin, Y. V. (2006). The state and prospects of depreciation policy development in Ukraine. Bulletin of the ZhDTU, no. 4 (38), pp. 164-177.
- Ministry of Finance of Ukraine (2000). Regulation (Standard) of Accounting 7 “Fixed Assets”, available at: http://zakon0.rada.gov.ua/laws/show/z0288-00 (Accessed 20 June 2018).
- Stadnytskyi, Yu. H. and Sagan, T. L. (2002). Depreciatio policy as a potential factor for improving the investment climate in Ukraine.Actual problems of the economics, no. 11, pp. 33-37.
Українська