Classification and economic essence of fixed and current assets of an enterprise

To effectively manage an enterprise's economy and understand what makes up the cost of production, an agronomist must clearly distinguish between resources as objects of labor and means of labor. In monetary terms, objects of labor form circulating assets, and means of labor form fixed assets. The sum of these resources in monetary valuation constitutes the total production assets of the farm.

Objects of labor include seed, fertilizer, plant protection products, feed, nursery plants, and fuel. In the technological process, they are characterized by the following features:

• they are fully consumed within one production cycle;
• as a rule, they change their physical form;
• they become part of the newly created product;
• they transfer their value to the harvested crop, forming a significant portion of the cost of production;
• they require continuous renewal and replenishment for each new production cycle.

Means of labor include agricultural machinery, equipment, buildings, structures, as well as working and productive livestock. They participate directly in production but possess different economic properties:

• they do not physically enter into the finished product;
• they retain their physical form over a number of years or several production cycles;
• they transfer their value to the created products or services gradually, as they wear out;
• only their worn-out portion is included in the cost of production;
• they are replaced by new items only after becoming fully depreciated and written off the balance sheet.

Classification and structure of fixed assets

The enterprise's fixed assets are subdivided into production assets for agricultural purposes (main production) and non-agricultural purposes (industrial, construction, and trade facilities). The first group includes buildings, structures, working and productive livestock, machinery and equipment, transport vehicles, and perennial plantings. By industry classification, production assets are divided into those for crop production, livestock production, and general purposes.

In addition to production assets, non-production fixed assets are used at the enterprise to provide non-material services — facilities for housing and utilities, consumer services, education, culture, healthcare, physical education, and sports.

• Share of agricultural assets — more than 80%
• Share of buildings and structures in fixed assets of the Russian Federation — more than 70%

The percentage ratio of individual types of assets in their total value, taken as 100%, is called the asset structure. It is influenced by the enterprise's specialization, intensity of production, climatic conditions, financial capabilities, as well as the distance to markets for material and technical resources and product sales.

Buildings and structures account for the largest share in the structure of fixed assets of Russian agricultural enterprises — more than 70%. They are referred to as the passive part of assets, in contrast to the active part, which includes agricultural machinery and transport vehicles directly involved in technological processes.