Fixed assets include assets that are designed to be used by the company for its continuously operations. Whether an asset is part of the fixed assets, it results from its purpose, not from its accounting. If the purpose is not clearly ascertainable, the accounting may be a reference point for the allocation of fixed assets.
Fixed assets may include:
As intangible (incorporeal) assets are considered: rights, rights assimilated values and other benefits. For intangible assets belonging to the fixed assets an asset item has to be introduced if they have been acquired according to §5 (2) Income Tax Act, or they have been inserted in the working capital according to Rule 14, paragraph 1 of the Income Tax Regulations .
According to § 240 (2) Code of Commercial Law, § 246 Code of Commercial Law, § 140 and § 141 of Tax Code the taxpayer are committed to prepare for each balance sheet key date, a list of items of movable and immovable fixed assets.
Financial assets are part of the fixed assets. They include for example participations and loans to other companies and long-term securities. The corresponding reference may be found under § 271 Code of Commercial Law.
In the case of the assets belonging to fixed assets with time-limited utilization, the acquisition or manufacturing costs have to be reduced by the value of the scheduled depreciation. The scheduled depreciation is generally made in equal annual instalments over the useful life (straight-line depreciation). Exceptionally, it is admitted a depreciation with decreasing amounts (degressive depreciation) or under the terms of the power output (unit of production method of depreciation) if it is more adequate to its lifecycle. Furthermore, the tax law stipulated a number of special depreciations, which we cannot approach here because of their vastness.
In the fixed assets accounting, there is a great creative leeway, which we carefully examine in order to ensure the maximum success for your company.
In order to increase reliability of the accounting, BBC provides fixed assets accounting on monthly and not annually basis. The fixed assets accounting includes the following:
- Maintenance of the register of the property items belonging to the fixed assets
- Entry of the current master data changes
- Observance of all legal requirements
- Recording of the inward and outward movement of the fixed assets
- Calculation of depreciation / value decrease based on a careful examination of the optimum value
- Correct identification of the residual book values
- Calculation of the implicit costs
- Entry of the ownership over land and buildings and the calculation of a use charge