REVIEW
of
FINANCE -
Apr. 2018
35
management accounting in construction
enterprises in line with the industrial revolution
4.0 is very necessary and meaningful in both
theoretical and practical terms.
Contents of fixed assets management accounting
in construction enterprises
The construction industry is a specialized
material manufacturing industry, so its products
also have particular characteristics varying
to other material manufacturing industries in
the economy. Construction products are fixed,
therefore fixed assets will be transferred to
construction products, so fixed assets are often
outdoors, and fixed assets are easy to be lost or
damaged, which reduces the value of fixed assets’
utilization.
Therefore, the management of fixed assets
by fixed assets management accounting tool
in the industrial revolution 4.0 is extremely
essential. Fixed assets management accounting
in construction enterprises includes the following
contents: Classification of fixed assets, issuing
an internal regulation on the use of fixed assets,
fixed asset encoding for each type, each property
group, estimate purchasing, renting fixed assets,
collecting information about fixed assets and
making long-term decision.
Classification of fixed assets
Classification of fixed asset means the division
of all fixed assets in enterprise according to
certain criteria in order to meet the management
requirements of enterprise.
Classification of fixed assets will help
enterprises see the specific characteristics of fixed
assets from which managers can have plan to
use, invest fixed assets to gain high efficiency. At
the same time, the classification of fixed assets
is the basis for managers to decentralize the
management level of fixed assets, enhance the
responsibility of users of them.
There are different ways to classify fixed asset:
Classification of fixed assets by morphology:
According to this classification criteria, fixed
assets of enterprise are divided into two categories:
Tangible fixed assets and intangible fixed assets.
Tangible fixed assets are assets represented
by specific physical forms such as building,
structure, machinery, equipment, transportation
means, transmission equipment, management
tool equipment, perennials, livestock, products
and other tangible fixed assets.
Intangible fixed assets are tangible fixed assets
which represent an amount of investment that is
directly related to the business production process
of a firm the production and business process of
enterprises such as land use rights, cost for set up
of business, investment and development costs,
invention patents, trademarks, copyrights.
This classification helps the manager to see the
structure of the firm’s investment in fixed assets,
thus choosing the right investment decisions or
adjusting the investment structure to suit the
situation of the enterprise and have the most
effective management and depreciation measures.
Classification of fixed assets by purpose of use:
According to this classification criteria, fixed
assets of enterprise are divided into the following
three categories: Fixed assets used for business
purposes, fixed assets used for welfare, non-
business, security, national defense and fixed
assets for maintenance and storage for the State,
for the other enterprises...
Fixed assets used for business purposes are
tangible fixed assets or tangible fixed assets
directly involved in the production and business
process of enterprises.
This classification helps the manager to see the
structure of fixed assets according to the purpose
of use, from which has measures to manage fixed
assets by purpose in order to use to achieve the
most effective performance.
Classification of fixed assets according to use
situation:
According to this classification criteria,
enterprise’s fixed assets are divided into 3
categories: Fixed assets are in use, fixed assets
have not been needed and fixed assets are not
needed and awaiting for liquidation.
Fixed assets are being used that are fixed assets
used for business activities or other activities of
enterprise.
Fixed assets have not been needed are fixed
assets necessary for business activities or other
activities of enterprises, but not has not yet been
used, which are reserved for later use.
Fixed assets are not needed and awaiting for
