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Accounting for cost of fixed assets repair under Russian Accounting Standards and IFRS

Vol. 18, Iss. 36, SEPTEMBER 2015

Received: 17 November 2015

Accepted: 25 November 2015

Available online: 27 January 2016

Subject Heading: ACCOUNTING SYSTEMS ADAPTING

JEL Classification: 

Pages: 18-32

Kemaeva S.A. Lobachevsky State University of Nizhny Novgorod – National Research University, Nizhny Novgorod, Russian Federation
s.kemaeva@mail.ru

Kemaev K.V. Lobachevsky State University of Nizhny Novgorod – National Research University, Nizhny Novgorod, Russian Federation
kvk@fis.unn.ru

Importance The article discusses various types of repair of fixed assets, specifics of accounting for cost of fixed assets repair under Russian Accounting Standards and IFRS.
     Objectives The target of the study is to compare the accounting treatment of costs of fixed assets repair as required by Russian regulations and IAS 16 Property, Plant and Equipment, and to consider different accounting options for material cost of fixed assets capital repair.
     Methods The study rests on the comparative analysis, systematization and generalization of information. The systems approach helps describe the concepts of operating repair, capital repair and technical maintenance, and identify approaches to selecting the accounting options for costs of repair and their distribution.
     Results The study defines possible options of accounting for and taxation of fixed asset maintenance and repair costs, considers types of repairs from the point of view of their accounting treatment as required by the legal documents of the Russian Federation and IFRS. We determined that the convergence of national accounting standards with international standards may change the accounting treatment of costs of fixed assets repair.
     Conclusions and Relevance The existing Russian Accounting Standards have no direct rules for capitalization of costs of fixed assets repair or requirements to create reserves for these costs. Our analysis shows that the identified differences can be settled when developing accounting policies of the organization, paying attention to the provisions of accounting, taxation and IAS 16 Property, Plant and Equipment.

Keywords: cost, repair, fixed assets, overhaul, capitalization

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