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liquidation are those that are not necessary or not
suitable to the production and business tasks of
enterprise, which need to be liquidated or sold to
recover the initial investment capital.
According to this classification, the manager
sees how effectively the fixed assets are used,
thereby further improves efficiency of using fixed
assets.
Classification of fixed assets by economic uses:
According to this classification criteria,
fixed assets of enterprises are divided into two
categories: Fixed assets used in production and
business and fixed assets used outside production
and business.
Fixed assets used in production and business
are tangible and intangible fixed assets directly
involved in the production and business of the
enterprise.
Fixed assets used outside production and
business: are fixed assets used for public welfare,
not bearing business production nature.
According to this classification, the manager
knows fixed asset structure, the effect of fixed
assets in the production and business process of
enterprise, creating favorable conditions for the
management and use of fixed assets and accurate
depreciation calculations.
Classification of fixed assets by source:
Based on the source, the fixed assets can be
divided into two types: Fixed assets formed from
ownership capital source and fixed assets formed
from liabilities.
According to this classification helps the
manager to know where is the source of
enterprise’s fixed assets , from which the manager
has the measures to monitor, manage and use
fixed assets with the most effective way.
Classification of fixed assets by ownership:
Based on the ownership situation, the fixed
assets can be divided into two types: Available
fixed assets and outsourced fixed assets. Fixed
assets which are outsourced include finance lease
fixed assets and operation lease fixed assets. Inside:
Fixed assets leased for operation are leased
fixed assets for use in a certain period of time
under the contract, upon the termination of the
contract, the fixed asset must be returned to the
owner. For this kind of fixed asset, the enterprise
does not depreciate its depreciation expense;
the fixed asset lease expense is accounted into
the production and business expenses in the
period.
The financial leasing fixed assets are the fixed
assets which enterprise leases from the finance
leasing company. At the end of the lease term,
the lessee may choose to repurchase the leased
property or continue to lease it in accordance with
the terms agreed in the finance lease contract. The
total amount of rent for a property specified in the
financial lease contract must be at least equivalent
to the value of that property at the time of signing
the contract.
All fixed assets leased if they fail to satisfy the
above-mentioned requirements shall be regarded
as fixed assets for lease.
Under this classification, the manager knows
the fixed asset structure belongs to ownership
of the enterprise and the fixed assets owned by
another for the rational use of fixed assets of the
enterprise and improve the efficiency capital.
Issuing an internal regulation
on the use of fixed assets
In order to enhance the user’s responsibility
for fixed assets, companies need to monitor the
fixed assets for each department, each of which
will attach the manager’s responsibility to each
department. At the same time, it is essential to
issue the internal regulations on the use of fixed
assets. By doing so, the manager will have a higher
responsibility for managing the fixed assets of the
company.
Fixed asset encoding for each type,
each property group
The fixed asset code is the encryption of
accounts through the use of digits arranged in a
certain order and manner to identify each type
of fixed assets, each fixed assets group and fixed
assets object in the group.
Each asset, regardless of use or reserve, must
be encrypted separately.
Fixed assets which are liquidated or sold by the
enterprise shall not be re-used for newly received
fixed assets.
Encoding fixed assets varies depending on
each enterprise. The encoding of fixed assets for
each type of fixed asset is united during the time
