Optimization of methods and standards of depreciation of fixed assets in agriculture

Maryna Mykhaylivna Mohylova


Introduction. Modernization of material and technical base of agriculture requires the activation of investment processes. An important tool for the regulation of reproduction of fixed assets is rational depreciation policy. Its key elements are the optimum methods and rational depreciation norms of fixed assets, which have been defined as those  that are allowed to be used by normative legal acts at the macro level and are chosen among alternative ones at micro level.

Goal. The purpose of the article is the substantiatethe best practices and differentiated depreciation rates for different types of fixed assets for agricultural purposes.

The method (methodology). The study has used a comparative approach to identify the advantages and disadvantages of each method of depreciation to justify their optimal use.

Results. For accrual of depreciation on fixed assets among alternative methods we must choose the most optimal and rational, which will ensure compliance with the principle of accrual, matching revenues and expenses,necessary rates and proportions of reproduction of fixed assets. In the article the recommendatory priority in applying methods of accrual of depreciation for certain types of fixed assets for agricultural purposes on the basis of the following principles: taking into account the advantages and disadvantages of each method in terms of their nature and the realities of the practice of agricultural enterprises; preferential use of accelerated depreciation methods according to the present state providing the basic means of agricultural production by type and their relation to the development of certain sectors of agriculture; optimization of methods of depreciation according to differences in the relative rates of moral run-out. It is proposed to put into practice the variable depreciation regulation oriented at enhancing the investment activity of agricultural enterprises.

The proposed recommendations on the use of depreciation methods and differentiation of its norms can be used in the practice of agricultural enterprises.

Conclusions. Formation of rational depreciation policy in terms of its regulatory liberalization involves choices among alternative optimal methods of depreciation. According to institutional theory for for agricultural enterprises it is recommended to apply scientific reasonable depreciation for different types of industrial assets.


amortization; depreciation methods; norms of depreciation; fixed assets; agriculture

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Science Works Journal "Ekonomichnyy analiz"

ISSN 1993-0259 (Print)  ISSN 2219-4649 (Online) DOI: 10.35774/econa

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