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MOTOR SICH
n
Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of
assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity
participants (shareholders).
The elements of financial statements are subject to recognition if they meet the above-mentioned definitions, if it is
probable that any future economic benefit associated with them will flow to or from the Company; and if the item's cost
or value can be measured with reliability.
Non-current Assets
Fixed Assets
Cost value of fixed assets is subject to recognition as asset only if:
n
there is a probability that the Company will obtain future economic benefit related to the item;
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the item's cost value can be measured with reliability.
All items of fixed assets, which are acquired, obtained or produced by own means, but are not put into operation, are
reflected in the accounts of capital construction and fixed assets acquisition (manufacturing). After actual putting into
operation, items or their components which are parts of the starting complex are transferred to the corresponding fixed
assets accounts. Before putting into operation, items (components) are recognized as qualifying assets provided that the
period of their creation exceeds 365 days. In that case, the fixed assets cost value includes financial expenses connected
with creation of such qualifying assets according to the National Accounting Standards (Regulations)/the International
Financial Reporting Standards.
Items of fixed assets which were acquired (built) for the purpose of sale are classified as the goods for resale and are
accounted as per section “Inventories” of the Accounting Policy.
Subsequent expenses which are referring to the item of fixed assets that is recognized already, increase its balance cost if
it is supposed acquisition of the future economic benefits exceeding originally calculated standard parameters of the
existing item of fixed assets.
Amortization of Fixed Assets
Amortization of fixed assets is calculated by straight-line method according to the useful life determined by technicians
of the Company.
Liquidation value of fixed assets is equal to zero for calculation of amortization.
Depreciation of the acquired asset is started from the next month after putting the asset into operation.
The land is not depreciated.
The capital assets of little value which are used for the needs of items of social sphere are depreciated 100 % at the
moment of their putting into operation.
The capital assets of little value which are used for the needs of primary production are depreciated by productionmethod.
The other capital assets of little value are depreciated 50 % when they are put into operation and 50 % when they are
written-off from balance.
The Company stops recognition of the balance value of fixed assets:
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after retirement of the asset;
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when no future economic benefits are expected from its operation or retirement.