VALUATION CORP. MOSCOW, RUSSIA

E-mail: ocenka-co@mtu-net.ru   phone:+7 495 9993419  fax:+7 495 4666654

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THE VALUATION CORP. PROVIDES REVALUATION OF FIXED ASSETS IN MOSCOW AND OTHER RUSSIAN REGIONS

Fixed assets revaluation is the most common task performed in valuation. The last few years have witnessed significant changes in this area, affecting various aspects of valuation of business assets for the purposes of accounting under the Russian accounting standards, including fixed assets revaluation.

Thus, according to the amendments introduced to the Russian Tax Code, with effect from 2002 the results of fixed assets revaluation are only reflected in business accounting records. The value of fixed assets for tax accounting purposes remains unchanged. It should be noted that these amendments were adopted in May 2002, but became effective as from January 1, 2002, that is, retroactively.

It is also notable that these amendments change the procedure for revaluation of fixed assets acquired before and after January 1, 2002 in a different way.

So what are the changes in the revaluation of fixed assets acquired after January 1, 2002? First, now revaluation does not produce any impact on the taxable profit of an entity. That is, the gain (increase in the value of fixed assets) does not increase the taxable profit, and the loss (decrease in the value of fixed assets) does not reduce it. Second, revaluation does not change the book value of a fixed asset and, therefore, does not influence the amount of amortization.

As for the fixed assets purchased before January 1, 2002, their revaluation will produce certain effect on their value determined for tax accounting purposes. However, not to the full extent. The revised Tax Code states that “revaluation shall be taken into account for taxation purposes in an amount not exceeding 30 percent of the reproduction cost of the items of fixed assets in question carried on the taxpayer’s books as of January 1, 2001.” 

When deciding on the revaluation of fixed assets forming a homogenous group (buildings, structures, vehicles, etc.), an entity should take into account that in the future the items of fixed assets belonging to this group should be revalued on a regular basis to ensure that the value of these items reflected in accounting records and statements does not significantly differ from their current (reproduction) cost.

It should be noted that according to the Guidelines on the Accounting of Fixed Assets approved by order of the Russian Ministry of Finance No. 91n of October 13, 2003, land parcels and objects of nature use (water, subsoil and other natural resources) and not subject to revaluation.

Our company has extensive experience in revaluation of fixed assets of large and small enterprises in various industries. By cooperating with us in this area, you get a guarantee of receiving assistance from skilled valuation professionals who act with account taken for all regulatory requirements and the most recent changes in the legislation.