When and how revaluation of fixed assets is carried out - cost recalculation methods and sample documents

Fixed tangible and intangible assets constantly change their residual value. The majority gradually lose it, transferring it to the products produced with their help - through depreciation. But there are also situations when, as a result of modernization or improvement, a particular asset increases in value. In addition, the enterprise renews its material assets, acquiring new ones to replace worn-out ones, and expands their base. One way or another, the value of an enterprise’s main assets is a parameter that is constantly in dynamics, and therefore requires regular analytical and accounting.

It is important that this parameter is in real accordance with the market characteristics of value in order to reflect the true residual value in accounting documents, and not just expressed in certain figures.

In the article we will highlight the essence of the procedure for revaluing the main property assets of an organization, as it occurs in accordance with the latest legislative innovations, and also show how this is done using a specific example.

The essence of revaluation of fixed assets

The property of an enterprise changes its value over time as a result of wear and tear (physical and/or moral). Market processes occur in parallel, changing the price of various assets at different speeds: real estate, equipment, tools, vehicles, etc. The revaluation is carried out precisely in order to bring these data to a single indicator.

The dynamics of the market value of assets is very uneven, it is difficult to assess from the point of view of certain factors, therefore the value of property at any given moment does not reflect its real price in modern market conditions. Hence, significant distortions in various asset parameters are possible:

• cost;
• depreciation charges;
• profitability of funds;
• bases for taxation.

So, revaluation of an organization’s fixed assets is a clarifying measure to bring the residual value of assets to the level of their actual price on the market, that is, establishing the full price that would be needed to restore or renovate them to their original state in modern realities.

FOR EXAMPLE. Two years ago, the company purchased new equipment that cost 50,000 rubles. Over two years, it lost 7 thousand rubles as a result of depreciation. Thus, its residual value according to accounting documents will be 43 thousand rubles. But as a result of certain market processes (the manufacturer released an improved model), the real cost of such equipment of a given level of wear on the market is only 35 thousand rubles. This means that today it can be sold for exactly this amount. It is necessary to carry out a revaluation, as a result of which this equipment will be reflected on the balance sheet at a cost of 35 thousand rubles, which is its real market price, reliable for financial accounting.

Amendments to the tax code and changes in the procedure for reflecting and accounting for revaluation results

Recent amendments to the Tax Code have changed the procedure for recording the results of revaluation of fixed assets of enterprises.

Now, if an enterprise changes the book value of property after January 1, 2002, these results will be reflected only in accounting. The value of the property in tax accounting will remain unchanged.

Enterprises still have the right to revaluate fixed assets (all in full or homogeneous groups) once a year at the beginning of the year. The difference is that, firstly, the revaluation of fixed assets does not affect the amount of taxable profit of the enterprise, and secondly, its value in tax accounting does not change, which means that depreciation is charged in the same order and in the same amounts that the enterprise had before the revaluation of fixed assets.

From this point of view, it has become unprofitable for enterprises to revaluate fixed assets in the direction of increasing their value, since depreciation deductions do not increase and the amounts of taxable profit and the profit tax itself remain unchanged.

On the other hand, it is beneficial to revalue property if its value decreases. This will help the company save on property tax, since this tax is calculated based on the value of the property at which it is listed in the accounting records. Therefore, if the book value of property decreases after the revaluation of fixed assets, then the absolute value of the tax will become less.

Is it necessary to revalue funds?

According to clause 15 of PBU 6/01 “Accounting for fixed assets”, approved by order of the Ministry of Finance of Russia dated March 30, 2001 No. 26n, an enterprise has the right, but not the obligation, to revaluate its property. The mandatory nature of this procedure in the Russian Federation was abolished in 1997.

The legislative procedure for the revaluation of property funds is set out in the Tax Code of the Russian Federation in Art. 256 “Depreciable property”, as well as in Art. 257 “The procedure for determining the initial cost of depreciable property.” According to the regulations, the following conditions must be met:

• Having carried out a revaluation once, the company must do this procedure regularly, but not more than once a year (this becomes an obligation);
• the result of the revaluation must be reflected in the documents at the end of the reporting period (before 2011 it was at the beginning);
• objects of revaluation must be owned by the organization;
• the revaluation procedure must be approved in the accounting policy of the organization;
• the beginning of the revaluation process is initiated by an order for the enterprise and the preparation of a list of revalued objects;
• commercial enterprises leave the question of independently conducting revaluation or attracting third-party organizations for this to their own discretion.

Preparatory work before revaluation

In order to carry out a revaluation, the organization must carry out preparatory work - for example, check the presence of the fixed assets themselves that are subject to revaluation.

The decision to conduct a revaluation is formalized in the appropriate administrative document. Its use is mandatory for all services of an economic entity that will be involved in the revaluation.

Revaluation is carried out at current (replacement) cost by indexation or direct recalculation at confirmed market prices.

In order to determine the current (replacement) cost, you must use:

• data on similar products received from manufacturing organizations;
• information on price levels available from statistical bodies, trade inspectorates and organizations;
• information on price levels published in the media and specialized literature;

Important

Revaluation is carried out at current (replacement) cost by indexation or direct recalculation at confirmed market prices (clause 15 of PBU 6/01).

From January 1, 2011, by order of the Ministry of Finance of Russia dated December 24, 2010 No. 186n, changes were made to paragraph 49 of the Regulations on accounting and financial reporting in the Russian Federation (approved by order of the Ministry of Finance of Russia dated July 29, 1998 No. 34n), paragraphs 43 — 47 Instructions No. 91n. According to these innovations, revaluation of fixed assets should be carried out no more than once a year and at the end of the reporting period. Previously, it had to be carried out at the beginning of the reporting period (clause 49 of the “Regulations on accounting and reporting in the Russian Federation”, approved by order of the Ministry of Finance of Russia dated July 29, 1998 No. 34n).

Goals and objectives

In accounting practice, the revaluation of fixed assets of an enterprise is carried out in order to:

• determine the adequate market value of this fixed asset;
• to attract investment partners (for example, for collateral value when lending);
• with prospects for increasing the authorized capital;
• with plans for restructuring;
• to clarify the cost and price of manufactured products (as part of financial analysis);
• to avoid a fall in the market value of assets below the authorized capital (this threatens the liquidation of the company);
• if you need to provide financial statements according to international standards;
• when insuring property (the insurance base is specified);
• the opportunity to reduce property tax (for companies with low profits), since the value of fixed assets on the balance sheet will decrease;
• a decrease in the income tax base (for profitable organizations) as a result of an increase in depreciation charges if the value of fixed assets increases after revaluation.

Objectives of revaluation in IFRS and RAS

Revaluation of fixed assets is bringing (revaluation or writedown) of their accounting book value to a value corresponding to the market value at the current reporting date. This concept is used both in IFRS and RAS, and has many common features.

Revaluation in IFRS for the purpose of drawing up a statement of financial position is mandatory (clauses 29–31 of IFRS 16, introduced in the Russian Federation by order of the Ministry of Finance of Russia dated December 28, 2015 No. 217n), and in RAS the mandatory nature of its implementation is determined by the accounting policies of the reporting entity (clause 15 PBU 6/01, approved by order of the Ministry of Finance of the Russian Federation dated March 30, 2001 No. 26n). The purpose of revaluation for Russian reporting (both mandatory and compiled for internal use only) may be:

• determination of the real current value of fixed assets, including for the purpose of their sale;
• determining the collateral value of the property to obtain a loan;
• planned increase in the authorized capital at the expense of funds from revaluation;
• formation, taking into account these data, the cost of production and its selling price for the purposes of financial analysis;
• increasing the investment attractiveness of the company.

What kind of property can be revalued?

Revaluation of fixed assets can be carried out in relation to:

• working equipment;
• real estate – buildings and structures, including unfinished ones;
• devices, machines, tools;
• computer technology;
• Vehicle;
• various equipment;
• equipment that is just prepared for installation;
• any fixed assets that are currently not operational, but have not been written off from the balance sheet (on conservation, in reserve, being prepared for write-off, etc.).

Significance of revaluation of fixed assets

The materiality requirement is set out in clause 44 of the “Methodological guidelines for accounting for fixed assets”, approved by order of the Ministry of Finance of Russia dated October 13, 2010 No. 91n. It states that the value of revalued fixed assets reflected on the balance sheet must differ significantly from the original value, otherwise there is no point in carrying out a revaluation. The materiality barrier is conditionally set at 5% (according to the order of the Ministry of Finance of Russia dated July 22, 2003 No. 67n), each organization has the right to independently establish it in its accounting policies, enshrining it in local acts.

FOR EXAMPLE. Brigantina LLC decided to revaluate its fixed assets. According to the balance sheet at the end of the previous reporting year, the cost of fixed assets was 2,000,000 rubles. (let's assume that the OS group is homogeneous). After revaluation, the current (replacement) value of the assets amounted to RUB 2,200,000. The difference is 2,200,000 – 2,000,000 = 200,000 rubles, which is 10% recognized as a significant difference, so these changes should be reflected in the balance sheet.

If the replacement cost was 2,020,000 rubles, then the resulting difference would not be considered significant and the decision on revaluation would not be made.

Frequency of revaluation

An organization can revaluate fixed assets once a year at the end of the reporting year, that is, on December 31. However, it can only be carried out across groups of homogeneous objects. Thus, it is not necessary to revaluate all fixed assets. However, having revalued one object from a group of homogeneous fixed assets, it is necessary to revaluate all other objects included in this group. This procedure follows from paragraph 15 of PBU 6/01 and paragraph 43 of the Methodological Instructions, approved by Order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n.

Situation: what are the deadlines for revaluing fixed assets?

Revaluation of fixed assets is carried out as of December 31 of the reporting year. The results of the revaluation are taken into account when compiling the Balance Sheet data for this year. This is stated in paragraph 15 of PBU 6/01 and paragraph 43 of the Methodological Instructions, approved by order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n.

The annual balance sheet must be approved depending on the legal form, in particular:

– by the general meeting of shareholders (JSC) – no earlier than two months and no later than six months after the end of the financial year (clause 1, article 47, subclause 11, clause 1, article 48 of the Law of December 26, 1995 No. 208-FZ);

– general meeting of participants (LLC) – no earlier than two months and no later than four months after the end of the financial year (subparagraph 6, paragraph 2, article 33, article 34 of the Law of February 8, 1998 No. 14-FZ ).

Thus, the possible timing of the revaluation of fixed assets is the period from December 31 of the reporting year until the approval of the annual balance sheet at the general meeting of shareholders (participants) of the following year.

Situation: how to determine groups of homogeneous fixed assets for the purpose of revaluation?

An organization can carry out a revaluation of fixed assets only for groups of homogeneous objects (clause 15 of PBU 6/01, clause 43 of the Methodological Instructions, approved by order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n). However, groups of homogeneous fixed assets are not established by law. In paragraph 44 of the Methodological Instructions, approved by Order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n, three groups of homogeneous fixed assets are given as an example:

• building;

• structures;

• vehicles.

Therefore, the organization must establish the remaining groups of homogeneous objects independently, registering these provisions in the accounting policy for accounting purposes. For example, following paragraph 3 of the Methodological Guidelines approved by Order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n, the following groups of homogeneous fixed assets can be established:

• transfer devices;

• working and power machines and equipment;

• measuring and control instruments and devices;

• computer equipment (office equipment);

• tool;

• production and household equipment and supplies;

• perennial plantings;

• on-farm roads.

What is needed for revaluation

Before starting the OS revaluation procedure, you need to carry out a number of preparatory activities, such as:

1. Checking the availability of fixed assets subject to revaluation. This stage ends with the preparation of a statement with a list of revalued objects.
2. Making a decision on revaluation and documenting it. Issuance of an organization order for all services that will take part in this process. The text of the order should reflect the following features:
   objects subject to revaluation;
3. revaluation methodology (method, method of reflection on the balance sheet);
4. persons responsible for conducting and processing the revaluation.
5. Collection and adoption of the necessary related information:
   information on the level of market prices for similar fixed assets (according to statistical data, information from trade inspections, etc.);
6. data on market value from the media and special literary sources;
7. information about the cost of products from partners and competitors;
8. expert opinions.

Methods of revaluation

The law defines two possible methods for changing the book value of fixed assets:

• indexation – the cost of fixed assets is adjusted based on special statistical deflator indices;
• direct recalculation relative to real market prices is used more often, since currently Rosstat does not regularly publish the statistical indices necessary to apply the first method.

NOTE! If this or that fixed asset has already been revalued, then in the future this procedure requires a recalculation at its replacement cost, taking into account the accrued amount of depreciation during the use of this property.

Revaluation results

The result of the revaluation of assets may be an increase or decrease in value compared to the market value. Thus, one of two procedures provided for by law can be carried out on the balance sheet: revaluation or markdown, after which the replacement cost on the balance sheet will be accepted as the original one.

OS revaluation

If the replacement cost turns out to be greater than the residual value, then this fixed asset must be revalued.

The amount by which the value of an asset or group of assets was increased is credited to the company's additional capital. In previous years, the amounts of depreciation charges that constituted a markdown and were included in the balance sheet as “other expenses” should have been equal to the accrued revaluation and included in “other income.”

Balance entries:

• debit 01, credit 83/91.1 – the amount of the initial cost of the fixed asset has been increased;
• debit 83/91.1, credit 02 – the amount of depreciation charges for this fixed asset has been increased.

OS markdown

Produced if, based on the results of indexation or recalculation, the replacement cost is less than the residual value.

This amount is classified as “other expenses”: it reduces the organization’s additional capital, which was formed by revaluing this fixed asset in other periods. The amount by which the excess is obtained constitutes the markdown. It is included in “other expenses”.

Balance transactions:

• debit 83/91.1, credit 01 – the initial cost of the fixed asset has been reduced;
• debit 02, credit 83/91.1 – accrued depreciation of fixed assets has been reduced.

ATTENTION! If, as a result of revaluation, a fixed asset completely loses value and is subject to write-off, its disposal is recorded and reflected as part of “other expenses”. In this case, the amount of its revaluation must be transferred to the organization’s retained earnings.

Determining the amount of revaluation or depreciation

Calculate the amount by which, based on the results of revaluation, you need to increase (decrease) the value of the fixed asset:

Recalculate the amount of depreciation accrued on fixed assets as of December 31 of the year of revaluation as follows:

Calculate the total amount of markdown (revaluation) for each fixed asset using the formula:

This procedure for carrying out calculations when revaluing fixed assets is established in paragraph 48 of the Methodological Instructions, approved by Order of the Ministry of Finance of Russia dated October 13, 2003 No. 91n.

An example of calculations when revaluing fixed assets

CJSC Alfa annually re-evaluates computer equipment.

As of December 31, Alpha listed a computer with a replacement cost of 50,000 rubles. The amount of accrued depreciation on the computer is 5,000 rubles.

Based on the results of the revaluation, the market price of the computer as of December 31 is 45,000 rubles. The conversion factor is 0.9 (45,000 rubles: 50,000 rubles). The recalculated amount of depreciation is 4,500 rubles. (RUB 5,000 × 0.9).

The amount by which the replacement cost of the computer must be reduced based on the results of the revaluation was 5,000 rubles. (50,000 rub. – 45,000 rub.). The amount by which you need to reduce the amount of depreciation accrued on a fixed asset is 500 rubles. (5000 rub. – 4500 rub.). The total amount of the depreciation of the fixed asset was 4,500 rubles. (5000 rub. – 500 rub.).

Impact on tax accounting

From a tax point of view, neither revaluation nor depreciation of fixed assets affects the amount of income or expenses of the organization, since the funds were not actually spent or acquired. Therefore, the income tax on the results of the revaluation will not change. This is reflected in the Tax Code of the Russian Federation and in letters of the Ministry of Finance of Russia dated July 8, 2011 No. 03-03-06/1/412, dated September 8, 2011 No. 03-03-06/1/544.

ATTENTION! The Tax Code provides for changes in the value of fixed assets only in cases clearly defined by law, such as reconstruction, modernization, liquidation, etc. (Part 2 of Article 257 of the Tax Code of the Russian Federation). Revaluation is not included in this list.

However, the revaluation will affect the tax base calculated for paying property taxes.

Therefore, in accounting and tax accounting, the amount of depreciation for a given fixed asset or homogeneous group will be reflected differently. Such a permanent difference causes the appearance of a permanent tax asset (clause 7 of PBU 18/02).

Accounting: additional valuation

In accounting, the amount of revaluation for each fixed asset item is reflected by the following entries:

Debit 01 (03) Credit 83 subaccount “Revaluation of fixed assets” - the initial (replacement) cost of the fixed asset has been increased;

Debit 83 subaccount “Revaluation of fixed assets” Credit 02 – accrued depreciation on fixed assets has been increased.

For a fixed asset that was previously discounted, make these entries only for the amount of the revaluation, which exceeds the amount of loss resulting from previous markdowns. Determine the amount of the loss using analytical accounting data (for example, using a statement of the results of revaluation of fixed assets). Reflect the amount of additional valuation of the fixed asset within the amount of loss from previous markdowns (reflected on account 91) with the following entries:

Debit 01 (03) Credit 91-1 – the initial (replacement) cost of the fixed asset was increased within the limits of the loss generated during previous markdowns of this object;

Debit 91-2 Credit 02 – accrued depreciation on a fixed asset has been increased within the limits of the loss generated during previous markdowns of this object

An example of reflecting the primary revaluation of a fixed asset in accounting

As of December 31, Alpha LLC conducted an initial revaluation of the computer. The organization has no other office equipment.

Based on the results of the revaluation, the initial cost of the computer should be increased by 2000 rubles, and the amount of accrued depreciation - by 200 rubles.

Alpha's accountant made the following entries in the accounting records:

Debit 01 Credit 83 subaccount “Revaluation of fixed assets” – 2000 rubles. – the initial cost of the computer was increased based on the results of revaluation;

Debit 83 subaccount “Revaluation of fixed assets” Credit 02 – 200 rub. – based on the results of revaluation, the accrued amount of depreciation on the computer was increased.

An example of how subsequent revaluation of a fixed asset is reflected in accounting. Based on the results of the previous revaluation, the fixed asset was discounted

As of December 31, Alpha LLC carried out a subsequent revaluation of the computer. The organization has no other office equipment.

Based on the results of the revaluation, the replacement cost of the computer should be increased by 2000 rubles, and the amount of accrued depreciation - by 200 rubles. The total amount of the revaluation was 1800 rubles. (2000 rub. – 200 rub.).

Due to the revaluation for the previous year, a loss in the amount of 800 rubles is recorded on computer account 91.

Alpha's accountant made the following entries in the accounting records:

Debit 01 Credit 91-1 – 889 rub. (2000 rubles × 800 rubles: 1800 rubles) – the replacement cost of the computer was increased based on the results of the revaluation within the limits of the loss generated during previous markdowns;

Debit 01 Credit 83 subaccount “Revaluation of fixed assets” – 1111 rubles. (2000 rubles – 889 rubles) – based on the results of the revaluation, the replacement cost of the computer was increased in excess of the loss generated during previous markdowns;

Debit 91-2 Credit 02 – 89 rub. (200 rubles × 800 rubles: 1800 rubles) – based on the results of the revaluation, the accrued amount of depreciation on the computer was increased within the limits of the loss generated during previous markdowns;

Debit 83 subaccount “Revaluation of fixed assets” Credit 02 – 111 rub. (200 rubles – 89 rubles) – based on the results of the revaluation, the accrued amount of depreciation on the computer was increased in excess of the loss generated during previous markdowns.

Revaluation factor

This indicator represents the ratio of the real (replacement) cost of the operating system to the original one.

Sometimes the revaluation coefficient is called a deflator index developed by Rosstat to carry out revaluation using the indexation method. As part of this method, the initial cost of fixed assets had to be multiplied by the coefficient established by Rosstat for this group, valid for the required period. These coefficients were regularly published by Rosstat specifically for the needs of revaluation. Rosstat developed them based on the prices of manufacturing companies, and for real estate - on the basis of prices for construction and installation work in various regions.

Today, the indexation method has not been officially canceled, but in fact it has lost force, since Rosstat has stopped publishing the regular dynamics of statistical deflator indices. An enterprise is not prohibited from using indexation during revaluation, but it must establish the index either independently or by contacting Rosstat for a fee. Therefore, in practice, in modern revaluation of fixed assets, the direct recalculation method is almost universally used.

IMPORTANT INFORMATION! Since, from the point of view of the law, there is a choice between the method of indexation and direct recalculation when revaluing fixed assets, it must be reflected in the accounting policies of a particular organization.

What can be overvalued in non-current assets?

The latest edition (dated 04/06/2015) of the full form of the balance sheet, approved by order No. 66n dated 07/02/2010, divides non-current assets into 9 lines, which essentially contain data on 5 types of assets:

• OS (this includes lines for OS, profitable investments, material exploration assets).
• Intangible assets (these are lines for intangible assets, R&D, intangible exploration assets).
• Unfinished investments in fixed assets and intangible assets (data on them in the balance sheet is either distributed between the lines of fixed assets and intangible assets, or allocated to the line of other assets).
• Long-term (for a period of more than a year) financial investments.
• SHE.

Read more about the composition of non-current assets in the balance sheet in the article “Balance sheet (assets and liabilities, sections, types)” .

Of these, revaluation is mandatory for financial investments for which there is an established procedure for determining their current market value (clause 20 of PBU 19/02, approved by order of the Ministry of Finance of the Russian Federation dated December 10, 2002 No. 126n). As part of non-current assets, these may be long-term securities. However, SMP has the right not to overestimate them (clause 19 of PBU 19/02).

Revaluation is possible:

• OS groups allocated for this purpose (clause 14, clause 15 of PBU 06/1, approved by order of the Ministry of Finance of the Russian Federation dated March 30, 2001 No. 26n).
• Groups of intangible assets identified for this purpose that are in circulation on their active market (clauses 16, 17 of PBU 14/2007, approved by order of the Ministry of Finance of the Russian Federation dated December 27, 2007 No. 153n).

Unfinished investments in fixed assets and intangible assets are not overvalued (letters from the Ministry of Finance of the Russian Federation dated November 10, 2005 No. 07-05-06/295, dated October 2, 2007 No. 02-14-10a/2480).

SHE are not subject to revaluation based on their nature. They represent temporary differences that arise when accounting and tax accounting data do not match, in particular, when forming the initial cost of fixed assets, intangible assets and financial investments. Revaluation of fixed assets, intangible assets and financial investments is possible only in relation to the accounting value of these assets, and for tax purposes it is not taken into account (subclause 24, clause 1, article 251, clause 1, article 257, clause 46, article 270 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of the Russian Federation dated December 14, 2012 No. 03-03-06/1/659). Therefore, the differences additionally arising between the book value and tax value due to revaluation will be permanent and will be taken into account in account 99. Account 09, intended for ONA, will not be affected by these charges.