The National and Foreign Features of the Accounting and Taxation of the Renewal and Repair of Non-Current Assets
Authors:   State Tax University, Izmailov Yaroslav O. , Yegorova Iryna G. ,   State University of Economics and Technology, Moroziuk Oleksandr O. ,   State Tax University
Published: May 2023

The purpose of the article is to systematize and substantiate the national and foreign peculiarities of accounting and taxation of the renewal and repair of non-current assets. It is proved that by investing in the renewal of non-current assets, the efficiency of economic activity of an enterprise is achieved, and compared to the acquisition or creation of new items of non-current assets, renewal and repairs require significantly less cost and are capable of increasing the productivity of economic activity of enterprises in a relatively short time and at relatively low cost. The authors propose to interpret renewal as a set of measures aimed at maintaining the items of non-current assets in working condition with elements of improvement of the initially expected economic benefits, as well as at increasing future economic benefits initially expected from the use of such assets. Such an interpretation of renewal will allow to include repairs and maintenance with elements of modification or modernization of individual parts of the item, which meets the needs of modern production and increases the objectivity of assessing the value of non-current assets that have undergone appropriate improvement. The authors substantiate both the national and foreign peculiarities of accounting and taxation of the renewal and repairs of non-current assets. The main problems of accounting and taxation of the renewal and ongoing repairs of non-current assets are identified, among which the main ones are as follows: arbitrary interpretation of the term «renewal» and diverse and inconsistent classification of types of renewal of the non-current assets in accounting and taxation practice in the absence of a clear disclosure of this concept in the national or international regulations; outdated primary documents; lack of specially designated accounts for accounting for the costs of repairing non-current assets and insufficient analytical orientation of subaccounts to the account 15 «Capital investments» to reflect the improvement of non-current assets – owing to the lack of a systematic classification of such costs; unregulatedness in legal acts of the process of determining cases when the implementation of a particular type of repair or renewal leads, or does not lead to an increase in future economic benefits originally expected from the use of the item, which complicates the procedure for accounting and defining the amount of possible changes in the valuation of non-current assets. A list of the main directions of development of digital socioeconomic relations in the context of global cooperation is proposed. To improve the system of accounting and taxation of the renewal and repair of non-current assets, it is proposed the following: reworking of regulatory legal acts in terms of disclosure of the concept of of «renewal» and providing a single reasonable classification of its types, which will contribute to an adequate presentation of information on the costs of the renewal of non-current assets and more fully meet the information needs of the analysis; definition of basic accounts and guidelines for accounting for these costs, especially taking into account the types of renewal, which will avoid possible erroneous accounting records and facilitate the formation of an analysis information base. The considered problems of accounting and taxation of the renewal and repair of non-current assets and proposed recommendations for their solution create the basis for continuing research in the direction of improving the methodology and organization of accounting and taxation of economic activity of enterprises in conditions of limited financial and material resources.