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ИД «Финансы и кредит»






Economic Analysis: Theory and Practice

Depreciation charges and depreciation fund

Vol. 17, Iss. 8, AUGUST 2018

PDF  Article PDF Version

Received: 21 May 2018

Received in revised form: 14 June 2018

Accepted: 3 July 2018

Available online: 29 August 2018

Subject Heading: SCHOLAR DISPUTE

JEL Classification: A11, M21, М41

Pages: 1584–1600


Grigor'ev A.P. OOO Аviton, Kaliningrad, Russian Federation

ORCID id: not available

Importance All over the world, economists are using the terms of depreciation and depreciation fund. There is an opinion that it is possible to buy or build something for depreciation charges. Under increasing requirements to company performance, managers and economists need to know the real profit earned depending on operating results.
Objectives The purpose of the study is to verify the theory of fixed assets value transfer to the manufactured product, prove the existence of depreciation fund, determine where it is located, define depreciation charges, and demonstrate the real company profit, which is necessary for managers and economists to analyze company performance.
Methods The study draws on the method of mathematical analysis and reasoning.
Results The paper proves the existence of depreciation fund, shows where it is located, and defines depreciation charges. The IFRS-based statements do not provide a complete picture of company earnings, and this fact misinforms economists and company executives. The value of fixed assets is not transferred to manufactured product in the process of production.
Conclusions To obtain reliable information on earned profit, it is crucial to create a new form of business report and a new accounting system.

Keywords: depreciation, IFRS statement, depreciation fund, profitability


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