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International Accounting
 

Federal Accounting Standard 6/2020: Disputable issues of using some aspects of depreciation of fixed assets

Vol. 24, Iss. 5, MAY 2021

Received: 5 April 2021

Received in revised form: 20 April 2021

Accepted: 22 April 2021

Available online: 14 May 2021

Subject Heading: NATIONAL STANDARDS OF ACCOUNTING AND REPORTING

JEL Classification: М41

Pages: 548–574

https://doi.org/10.24891/ia.24.5.548

Ekaterina K. KOPYLOVA Baikal State University, Irkutsk, Russian Federation
kopylovaek@gmail.com

ORCID id: not available

Tat'yana I. KOPYLOVA Baikal State University, Irkutsk, Russian Federation
kopylovati@bgu.ru

ORCID id: not available

Subject. Currently, it is still important to choose how depreciation is charged, since this exactly reflects how future economic benefits of fixed assets are allocated over time. Amendments to the Russian laws on the use of Federal Accounting Standard (FAS) 6/2020 Fixed Assets helped update not only the procedure, but also the terminology. This totally influence how depreciation is recognized as per accounting policies of a firm.
Objectives. The study focuses on the specifics of regulation and accounting for depreciation of fixed assets.
Methods. The methodology includes the methods of analysis, systematization, comparison and generalization of regulatory sources and scientific literature on the subject.
Results. We conducted the critical analysis of FAS 6/2020 in terms of using depreciation aspects, which relate to the useful life of a fixed asset, its drop value and depreciation method. Having analyzed regulatory documents, we summarized requirements to the useful life of fixed assets.
Conclusions and Relevance. Practical issues of the drop value assessment should be resolved with respect to international practices. We also suggest non-governmental regulators of the Russian accounting practice should outline guidelines for the assessment of the drop value. There are still pending issues concerning the calculation of depreciation when a fixed asset is not used each day of a month. The depreciation calculation method should be stipulated in accounting policies, like aspects of revising depreciation elements. Considering the use of FAS 6/2020, accounting policies should be updated to formulate the content of changed aspects. The findings may prove useful to accountants when updating accounting policies on the use of depreciation methods in 2022 and onward.

Keywords: depreciation of fixed assets, accounting, useful life, elements of depreciation, FAS 6/2020

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