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ИД «Финансы и кредит»






International Accounting

The formation of items of non-current assets in the balance sheet: The existing practice and strategies for improvements

Vol. 22, Iss. 6, JUNE 2019

Received: 11 April 2019

Received in revised form: 22 April 2019

Accepted: 29 April 2019

Available online: 17 June 2019


JEL Classification: М41

Pages: 650–662


Kulikova L.I. Kazan (Volga Region) Federal University (KFU), Kazan, Republic of Tatarstan, Russian Federation


Solntseva A.A. Kazan (Volga Region) Federal University (KFU), Kazan, Republic of Tatarstan, Russian Federation

ORCID id: not available

Subject The research investigates the current state of balance sheet as a source of information about non-current assets. The article provides the theoretical rationale for issues of improving the formation and use of items in the first part of the balance sheet.
Objectives The research examines the existing practice of forming balance sheet items in various entities, identifies their distinctive features and determines key aspects that might be improved in forming the information about non-current assets.
Methods The methodological framework includes the literature, regulatory documents, guidelines. The reliability of our findings is verified through observation, comparison, generalization and logic conclusions.
Results We demonstrated the analytical potential of the first part of the balance sheet. Capital expenditures on items to be recognized as fixed assets shall be presented as a separate item specifying Fixed Assets. It is reasonable to not only subdivide accounts receivable into current and non-current, but also post them to different sections of the Balance Sheet. Prepayments and advances to suppliers shall be recognized in line with their intended use and the asset to be acquired. We substantiate that R&D expenditures shall be recognized as an asset or expense, without being merged and presented as one item. Deferred expenses shall not be carried as an asset if they are to be subsequently attributed to expenses of the current period.
Conclusions and Relevance We note plenty of difficulties that currently arise in the formation of balance sheet items. Balance sheet, its structure and contents are not homogeneous across companies. They depend on sectoral distinctions and professional judgment of accountants that compile them.

Keywords: balance sheet, non-current assets, items, practice, improvement


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