Discussion On The Category Of Fixed Assets

Abstract: in accounting, real estate buildings and buildings belong to fixed assets in assets, but we know that one of the characteristics of assets is that they can bring "future economic benefits". That is to say, houses and buildings can only become assets of enterprises only if they can bring "future economic interests", but they may also become assets or liabilities of enterprises.

Key words: assets, fixed assets, liabilities, or assets, future economic benefits, bad debts, and opportunity losses.

Not long ago, Robert, T, Kiyosaki, a famous American investor, wrote a book, "poor dad, rich dad." in this book, the author put forward many thought-provoking opinions, one of which is that the house is not an asset but a liability.

From an accounting point of view, this view seems incorrect, because the accounting knowledge we have accepted has been formed in our consciousness. Housing is a fixed asset in assets. So what is housing?

Or debt?

The definition and characteristics of assets: (1) the definition of assets: the assets are the resources that the past pactions or events are formed and owned or controlled by the enterprises, and the resources are expected to bring economic benefits to the enterprises.

The characteristics of assets: (two) assets: 1, assets can directly or indirectly bring economic benefits to enterprises.

The so-called economic benefits refer to cash or cash equivalents flowing directly or indirectly to enterprises. Assets become assets because they can bring economic benefits to enterprises. If a project can not bring economic benefits to enterprises, it can not be recognized as assets of enterprises.

2, assets are owned by enterprises, or even owned by enterprises.

Enterprises have assets, and they can gain economic benefits from their assets. Some assets are not owned by enterprises, but enterprises can control the risk interests of these assets. Therefore, they can also gain economic benefits from assets. If enterprises can not own or control the economic benefits brought about by assets, they can not be regarded as assets of enterprises.

3, assets are formed by pactions or events in the past.

Assets must be real assets rather than expected assets. Only pactions or events that occurred in the past can increase or decrease the assets of enterprises, and can not identify assets based on negotiations or planned economic pactions.

Two, the definition and scope of fixed assets. (1) fixed assets refer to tangible assets with the following characteristics.

(1) for the production of products, services, rental or management.

2 years of service life.

The value of the unit is high (3).

Because of the different contents and scale of operation, the standard of fixed assets can not be absolutely consistent.

(two) the scope of fixed assets is that the fixed assets can be divided into movable property and real estate. The real estate includes the appendages on land, such as houses, land and buildings.

According to the above analysis, housing can be recognized as an enterprise's fixed assets if it reviews the above characteristics. Why is it that in "poor dad, rich dad", the author repeatedly stressed: housing is debt?

To understand this problem, we need to understand the liabilities.

Three, the definition and characteristics of liabilities.

The definition of liabilities refers to the actual obligations of past pactions or events, which are expected to cause economic benefits to flow out of the enterprise.

The characteristics of liabilities: (two) liabilities: 1, debt repayment is expected to cause economic benefits to flow out of the business.

The enterprise can not or rarely avoid it. If the enterprise can avoid it, it can not be recognized as the liability of the enterprise.

2, debt is a form of trading or events. Only pactions or events that happened in the past can increase or reduce the liabilities of an enterprise, and can not identify liabilities based on pactions or events in negotiations or planned economic pactions.

According to the above analysis, housing and buildings can only be recognized as liabilities when they cause the economic benefits of enterprises to flow out. But in accounting, this situation seems to have never happened. But why did Robert T Kiyosaki repeatedly emphasize that houses are liabilities and are recognized by most people?

In order to clarify this problem, we should analyze the following two situations: (1) building houses and buildings purchased with its own money: the housing and buildings purchased by the enterprises with their own money in the bank are the real assets owned by the enterprises and are in line with the characteristics of the fixed assets. Can the housing and buildings built by the enterprises bring the future profits to the enterprises?

1, it is necessary to define the meaning of "future economic benefits". First, it is necessary to define the meaning of "future economic interests". Literally, "future" is relative to the present time, referring to the future and the future. "Future economic benefits" can be understood as: because the past or present behavior brings some economic benefits that can be realized in the future and cost much more than the behavior itself, that is to say, from the monetary volume, the premise of the monetary stability is that the enterprises actually have more than what they have now, that is, to bring value added.

If a building or a building purchased with its own capital can bring future economic benefits, that is, when the value is added, then housing and buildings are fixed assets of enterprises. Conversely, if we can not determine whether economic benefits can be brought, should we identify them as liabilities?

2, it is uncertain whether it can bring "future economic benefits". Because of the risk in the market, "future economic interests" or "yes" or "big" or "small" should not be determined beforehand, that is, "future economic interests" have great uncertainty.

The author believes that if the "basic definition" can bring "future economic benefits", it will be recognized as a fixed asset. If the probability of its occurrence is between 95% and 50% (excluding 50%), we should call it fixed assets or assets. If the probability of occurrence is less than or equal to 50%, then we should call it liability.

The reason is: 1, we know that when an enterprise invests in buildings or buildings, it will cause a certain opportunity loss, that is, it will lose the opportunity to increase its value with other assets. Of course, if the investment houses and buildings can be sure to bring "future economic benefits", there will not be any "opportunity loss".

(2) the additional expenditure on housing or buildings, or the reduction of the useful life of houses and buildings due to environmental problems, such as houses and buildings which are abandoned in advance due to the national ban, if the probability of "future economic interests" is less than 50%, and now there is an outflow of economic benefits, we call it liability.

3, as long as there is property, we must pay the property tax. The so-called real estate is a place where there are roofs or enclosure structures (with walls or columns on both sides), which can cover the wind and rain, and allow people to produce, study, work, entertain, live or store materials in it.

From then on, we can see that houses and buildings belong to real estate, and they all have to pay the property tax, and the property tax is paid according to the balance value after the original value of the house is reduced by 10% 30%. If the probability of "future economic benefits" is less than 50%, and the annual expenditure of property tax will occur, that is, only when the current economic interests are flowing out, without the inflow of economic benefits or the outflow of economic benefits is greater than the inflow of economic interests, then we call it liability.

(two) enterprise loans to build houses and buildings: the enterprise loans form a liability, but the houses and buildings purchased by the enterprises are not owned by enterprises. Because we know that enterprises need loans, banks should have "double guarantees", that is, property mortgage loans and third party guarantees, mortgages can be movable property or real estate, and real estate must be secured by property rights.

1, the housing and building purchased by the enterprise loan can definitely bring the "future economic benefits" if it is "basically defined", which can bring the future economic benefits, and it can not be affirmed that this is fixed assets.

(1) if the future economic benefits of housing and buildings are less than or equal to loans plus interest, they will be called liabilities. In addition to the annual repayment of loans and interest, enterprises will also pay for environmental costs, property taxes and other opportunities.

(2) if the "future economic benefits" arising from the effective years of housing and buildings are greater than the "loan plus interest", we can not determine whether the expenditure is greater than the environmental cost, property tax and opportunity loss.

(3) if the "future economic benefits" are greater than the "loan plus interest" in the effective years of housing and buildings, it can also be identified as fixed assets.

2, it is uncertain whether it can bring "future economic benefits".

(1) if housing and buildings can bring the probability of "future economic interests" between 95% and 50%, the uncertainty is very large. Therefore, even if the former is greater than the latter, and it is also larger than property tax, environmental cost and opportunity loss, it can not be identified as fixed assets.

(2) if the probability of "future economic interests" occurring in buildings and buildings is less than 50%, no matter whether the "future economic interests" are greater than or equal to or smaller than "loans plus interest", they should be called liabilities.

In addition, in the loan contract period between enterprises and banks, because of some changes in enterprises, resulting in reduced income and increased expenses, enterprises will be unable to repay their debts because of their inability to repay their debts on time. At this point, there is no future economic interest. On the contrary, they will also have to spend a sum of financial expenses, purchase and build various expenses, and some opportunity losses.

Under the same circumstances, there are also in the loan contract period, because the real estate prices in the market fall, so that the borrower's unpaid mortgage debt is higher than the existing market price of their mortgages (houses). No matter whether it can bring "future economic interests" in the future, it is now foreseeable that the loan expenditure in the future will be much higher than the "future economic benefits". In addition, enterprises may suffer some unexpected calamities during the debt repayment period, and the profits they earn now are not enough for loans and interest.

　　有人會說，企業的錢和銀行的錢都是由國家來共同掌握，只不過是一件衣服上兩個口袋的錢罷了，確實，以前銀行與國有企業之間的信用關系被扭曲為資金供給關系，根本不考慮貸款的歸還問題和效益問題，銀行的巨額不良債權和國有企業的巨額不良債務，可以說是一個問題的兩個方面，據統計1996 1997年初，在我國32.2萬戶預算內國有企業的7.29萬億資產中，負債為5.18萬億元，資本金僅為2.11萬億，資產負債率為71%，而其負債中70%以上是銀行貸款，在這里，我們雖然不知道，這些貸款中哪些投資于了房屋、建筑物等不動產中，但每年的房屋折舊費、修補費都是要發生的，即使是錢從一個口袋轉到了另一個口袋，但在所創造的“未來經濟利益”微乎其微的情況下，無論錢周轉幾個口袋，所發生的支出仍然大于收入，那么，這些就永遠是國家的債務。

China is a large agricultural civilization with thousands of years of history. The way of living in the face of the Loess and its back to the sky makes the scarce land become the life dependency of the peasants. The "landlord" mode of thinking is deeply branded in the hearts of people. After entering the market economy tide, this landlord complex will be shown in another way, blindly pursuing the expansion of tangible assets and calling it "scale management". So no matter how the market is, how the technology first, the land will be surrounded and built up.

Although we do not agree that factory buildings are liabilities, we believe that Robert T Kiyosaki's view is reasonable and scientific.

Although we do not deny that houses and buildings are assets of enterprises and a fixed asset, we are not sure that real estate is the fixed assets of enterprises.

How to make real estate become a fixed asset depends on the size of future income, and it depends on the decision of the enterprise leader. Now, China has joined the WTO and fixed assets.