Accounting for the formation of a fixed-asset depreciation fund and its transformation into reproducible capital

Abstract

Subject. This article considers the depreciation of fixed assets not only as the distribution and write-off of their cost, but also as the accumulation of funds by systematically including in the cost of production (work performed, services rendered) the amounts of depreciation deductions for these fixed assets. Objectives. The article aims to develop a methodology for accounting for the creation and use of a depreciation fund as a source of financing for the acquisition (creation) of fixed assets and other non-current assets. Methods. For the study, we used analysis and synthesis, modeling, systematization, and generalization. Results. The article covers the organizational and methodological aspects of accounting for the creation and use of the depreciation fund, as well as reproducible capital, which are the source of acquisition (creation) of fixed assets. The article presents the author-developed methodology for accounting for the reflection of transactions on recommended new accounts when creating and using a sinking fund, as well as reproducible capital. Conclusions and Relevance. The conducted theoretical and applied research, revealing modern problems of accounting for depreciation of the cost of fixed assets, reveals the need to make changes in accounting for the write-off of depreciation of fixed assets and the introduction of a methodology for the creation and use of a depreciation fund and reproducible capital as sources for the formation of fixed assets and other non-current assets in commercial organizations. The results of the study can be applied in the theory and practice of financial accounting and reporting.