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A fixed capital of the enterprise.

Fixed capital is that portion of the total capital that is invested in fixed assets (such as land, buildings, vehicles, plant and equipment) that stay in the business almost permanently, or at the very least, for more than one accounting period. Fixed assets can be purchased by a business, in which case the business owns them, but also leased, hired or rented, if that is cheaper or more convenient, or if owning the fixed assets is practically impossible.Refining the classical distinction between fixed and circulating capital in Das Kapital, Karl Marx emphasizes that it is really purely relative, i.e. refers only to the comparative rotation speeds (turnover time) of different types of physical capital assets. Fixed capital also "circulates", except that the circulation time is much longer, because a fixed asset may be held for 5, 10 or 20 years before it has yielded its value and is discarded for its salvage value. A fixed asset may also be resold and re-used, which often happens with vehicles and planes.The reason is that land is not regarded as a product (a reproducible good). But the value of land improvements is included in the statistical concept of fixed capital, being regarded as the creation of value-added through production.Estimating the value of fixed capitalAttempts have been made to estimate the value of the stock of fixed capital for the whole economy using direct enterprise surveys of "book value", administrative business records, tax assessments, and data on gross fixed capital formation, price inflation and depreciation schedules. A pioneer in this area was the economist Simon Kuznets.Using the so-called "perpetual inventory method", one starts off from a benchmark asset figure, and adds on the net additions to fixed assets year by year, while deducting annual depreciation, all data being adjusted for price inflation using a capital expenditure price index. In this way, one obtains a time series of annual fixed capital stocks.

Investment risk of fixed capital A business executive who invests in or accumulates fixed capital is tying up money in a fixed asset, hoping to make a future profit. Thus, such an investment usually implies a risk. Sometimes depreciation write-offs are also viewed partly as a compensation for this risk. Often leasing or renting a fixed asset (such as a vehicle) rather than buying it is preferred by enterprises because the cost of using it is lowered thereby, and the real owner may be able to obtain special tax advantages.Initial formation of a fixed capital at again created enterprise prokishodit at the expense of an authorised capital part.Mechanical engineering fixed capital is subdivided into groups:

- Buildings

- Structures (tunnels, bridges, Ry ways etc.)

- Transfer systems (LEP, a heating system)

- Cars and the equipment:

- The power equipment (generators)

- The working equipment (machine tools)

- Measuring and the labware

- Computer facilities

- Other (phone, the fire equipment etc.)



- Means of transport

- Equipment

- Industrial stock

- Economic stock (the multiplying, printing engineering, tables etc.)

As structure of a fixed capital is called the parity of cost of the basic groups of a fixed capital and their total cost. The estimation of a fixed capital is made only in the monetary form. Has following kinds:

- Acquisition cost

- The restored cost (after revaluation)

- Reproduction new cost

- Financing of a fixed capital needs to be conducted at the expense of long credits.

Financing sources:

- Profit

- UK

- Long credits

- Government expenditure

- Means of off-budget funds

- Other means

 


Date: 2015-01-29; view: 827


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