Fixed Asset Valuation and Accounting Standards

AFE: Asset Valuation Principles

Fixed assets should be valued at acquisition cost, construction cost, or, where appropriate, their equivalent value. Interest accrued during the construction and installation of an asset can be capitalized or charged to the results of the period.

Fixed assets received as capital contributions should be recorded at market value.

Properties purchased in foreign currency must be registered at historical exchange rates. In the event of significant changes in monetary parity, specific committee newsletters will establish the necessary adjustments.

Land must be valued at the acquisition cost paid. The total cost of a building includes construction costs, computer facilities, and permanent fixtures. Labor costs intrinsically identified with machinery and equipment may be recorded as costs of those assets.

AFP: Financial Presentation

Fixed assets are presented after current assets, subtracting the total amount of accumulated depreciation. The integration of fixed assets into Property, Plant, and Equipment (PP&E) can affect the balance sheet or be recorded separately.

Asset Classification

• Subject to depreciation
• Not subject to depreciation
• Construction in progress: Presented separately from completed buildings, with mention of the projected final cost.

The methods and depreciation rates applied to major asset groups must be disclosed in the financial statements.

OA: Ownership and Accounting

• Assets acquired are owned by the company and physically exist.
• Assets are valued according to GAAP.
• Withdrawals or sales are properly accounted for by adjusting the acquisition cost and accumulated depreciation, recognizing any gain or loss on the sale.
• Depreciation policies must utilize a reasonable method.

CI: Internal Control Procedures

• Existence of an auxiliary register.
• Separation of duties between acquisition, sale, custody, and registration.
• Precise information for analyzing variances between actual and authorized purchases.
• Clear policy regarding the depreciation system.
• Periodic physical verification of assets and condition checks against auxiliary records.
• Proper asset protection through insurance and maintenance of original documentation.