Problems of choosing methods for evaluating fixed assets of an enterprise based on the materiality criterion

Abstract

Business operations with fixed assets significantly affect the structure of the balance sheet, income, expenses, profit and assessment of the financial condition of the enterprise.Their reflection in the financial statements is based on an accounting valuation. But such an assessment in legislative acts in most cases has a variable component. The availability of alternative parameters and valuation methods, on the one hand, provides additional tools for managing fixed assets. On the other hand, it requires economic justification.  The purpose of the article is to develop recommendations for improving the methodological support for the management of fixed assets of the enterprise. The article examines the regulatory framework governing accounting in Ukraine.The results of the study indicate that one of the main criteria for choosing one of the options for the method of evaluating accounting objects is the principle of relevance. In most cases, you also need to select the materiality threshold. The article systematizes qualitative and quantitative indicators of materiality for choosing the assessment of fixed assets at revalued cost, which are recommended by law and scientists. The advantages and disadvantages of revaluation of non-current assets for domestic enterprises are considered. The influence of this valuation method on relevant items of financial statements of a production commercial enterprise is studied.This acts as an information basis for managing the company's fixed assets. It is determined that usually the specifics of enterprises' activities require simultaneous selection of several objects of variability in the assessment of fixed assets. The paper develops an algorithm for selecting materiality thresholds for evaluating fixed assets.For its application, CVP analysis tools are proposed, namely sensitivity coefficients and threshold values of the materiality coefficient. Applying the algorithm in practice will speed up, simplify and provide clarity to the analytical stage of the management decision-making process regarding the choice of variable methods for evaluating fixed assets. This allows you to ensure the target level of key performance indicators in accordance with the strategic goal of the enterprise.