Fixed Asset Accounting and Valuation Standards

Fixed Asset Classification and Valuation

Fixed assets consist of all property and rights that remain within a company for more than one financial year.

Classes of Fixed Assets

• Intangible Assets: These include administrative concessions and industrial property applications.
• Equipment (Tangible Assets): This category covers land and natural resources, construction, installations, technical facilities, machinery, utensils, furniture, information processing equipment, transportation elements, and other material assets.
• Real Estate: This includes land and natural resources investments, as well as investments in construction.

Evaluation Criteria for Assets

Goods and rights classified as fixed assets are valued at their acquisition price. This price must include the amount invoiced by the seller plus all costs necessary for the asset's operationalization, such as:

• Transportation
• Customs duties and rights
• Insurance
• Installation and assembly
• Flatwork and preparation costs

Defining Asset Categories

Intangible fixed assets consist of assets that remain in the business for more than one financial year and are characterized by their lack of physical substance. Material assets (tangible assets) are characterized by their physical nature. Real estate investments include tangible items held to obtain income, capital gains, or both.

Amortization and Depreciation Processes

Amortization includes the cushion for the loss of value experienced by fixed asset elements. This loss is caused by the use of these elements, which leads to physical deterioration over time, as well as obsolescence.

Accounts According to the PGC for SMEs

The content and operation of these accounts, according to the General Accounting Plan (PGC) for SMEs, include:

• Depreciation of tangible fixed assets
• Accumulated depreciation of tangible fixed assets
• Amortization of intangible fixed assets
• Accumulated amortization of intangible fixed assets
• Amortization of real estate investments
• Accumulated amortization of real estate investments

Accounting for Asset Casualties

Casualties and Accidents: Asset casualties occur as a result of an accident, causing the destruction of the item and its subsequent removal from accounting records. In this case, the loss is recorded in Account 678 (Exceptional Expenses).

This applies whether the asset is material, intangible, or a real estate investment. The amount of the loss recorded matches the book value of the fixed asset at the time the incident occurs.