Anglicky v odborných předmětech "Support of teaching technical subjects in English“

1. Anglicky v odborných předmětech"Support of teaching technical subjects in English“ Tutorial: Business Academy Topic: Fixed Assets - Valuation Prepared by: Ing. Jana Šustrová Projekt Anglicky v odborných předmětech, CZ.1.07/1.3.09/04.0002 je spolufinancován Evropským sociálním fondem a státním rozpočtem České republiky.

2. ValuationofTangibleFixedAssets • Purchase price • Actual costs • Replacement cost

3. PurchasePrice Purchasepriceisthevalueofacquiredproperty. Thepriceincludesthecostsassociatedwithacquisition – itcomprises such costs as thefollowingones: • transport • customs duty • commission • assembly • exploration, geologicalandgeodeticwork • projectwork • administrativefees • costsassociatedwithbringingtheassetsinto use

4. Items not includedintothepurchaseprice: • Penalties, default interest, damagecaused in connectionwiththeacquisitionofproperty • Expenditure on trainingstaff to use newassets • Expenditure on supplies • Expenditureincurredafterputtingtheassetsinto use • Exchange differences on foreigncurrencypurchase

5. PriceatActualCost Itisusedforvaluationofthepropertywhichthecompanyacquired as a resultofitsownactivities (e.g. a warehousebuilt by theemployees, a specialapparatusmade by theemployees, etc.) • Includesalldirectcostsand a part ofindirectcostswhichwerespent on productionofassets • directmaterial • directwages • indirect (overhead) costs

6. ReplacementCost Itisusedforvaluationofthepropertyacquired free ofcharge, e.g. • gift • shareholder´s investment • newlyidentified in inventoryItisthepriceatwhichtheassetwouldbeacquiredattheaccountingtime. Itisdetermined on the basis ofprofessional expertise.

7. PriceIncreaseofFixedAssets Thepriceoffixedassetscanbeincreased by technicalevaluation, i.e. expendituresforextensions, reconstructionandmodernizationoftheassets, iftheyexceededtheamountof CZK 40,000 in oneaccounting period. ATTENTION! Do not confusewiththerepairandmaintenance!!! • Repair, maintenance = faultremoving, worn-outreducing • Reconstruction = changingthepurposeortechnicalparametersoftheasset • Modernization = extensionofthe equipmentandusabilityoftheasset

8. PriceDecreaseofFixedAssets • By subsidies received from the state budget, municipality or city budget • By the value of wearing-out of fixed assets, i.e. accumulated depreciation = book value

9. ACTIVITY I: The company purchased a new machine on the invoice; the invoiced amount is CZK 320,000. Transportation fee was CZK 5,000, installation fee was CZK 12,000. Training for the staff who will operate the new machine cost CZK 3,500. Find out the purchase price of the new machine.

10. ACTIVITY II: Matchthenumbers on theleftwiththeletters on theright • A. Donation of property • B. Shareholder´s deposit • C. Own production • D. Purchase • 1. Purchase price • 2. Replacement cost • 3. Actual costs

11. ACTIVITY III:Choose the correct answer Choose the items that are part of the cost of the fixedassets • project for the construction of a production hall • transportationofprocured machinery • exchange-rate differences when buying abroad • fee for building permits • training of workers to service machine • equipmentinventoryoffixedassets • payment of damages caused in building the foundations for a new building Technical evaluation of the tangible property by • cargo • increasing the price of fixedassets • lowering the price of fixedassets As the technical evaluation of the tangible property shall be considered expenditureon • the total repair of tangible assets • the total repair of tangible property if the value for the financial year exceeds the amount of CZK 40 000,-- • construction, reconstruction and modernization

12. RESOURCES: • Zákon č. 563/1991 Sb., o účetnictví