Evolution Of Tangible Fixed Assets In Romania Accounting Essay

Tangible fixed assets represent the chief constituent of the national wealth, being the material footing for the development of any economic and societal activity. Knowing information about the volume and construction of touchable fixed assets, their functionality, their technological degree, is indispensable for guaranting a proper direction that could take to the efficiency and quality of the economic and societal procedures. In this context, the paper approaches a series of theoretical facets mentioning to tangible fixed assets and presents the development of the chief field indexs, in Romania, after 1990, concentrating in peculiar on 2008-2010 to foreground the negative influence of the planetary economic crisis, started at the terminal of 2008.

Cardinal words: touchable fixed assets, planetary economic crisis, national wealth, nominal moral force, existent dynamc

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JEL Classification: E22

Introduction

Tangible fixed assets represent the chief constituent of the national wealth, being the material footing for the development of any economic and societal activity. Basically, the quality of the economic and societal procedures basically depends on the volume and construction of touchable assets, their reclamation degree, their functionality and their technological degree.

Due to the importance of touchable assets, both at macroeconomic and microeconomic degree, in clip, there have been changeless concerns associating to their definition in footings of value and structurally, to the uninterrupted updating of the statute law, harmonising the content, methodological analysis and regulations with the European and international 1s.

In pattern, the stock list, quantification and analysis of the touchable fixed assets are approached both of statistically and accounting point of position, to obtain a clearer, complex and existent economic image.

Therefore the paper presents theoretical facets both in footings of accounting ordinances and statistical indexs and the analysis is conceived in statistical footings.

Theoretical facets sing touchable fixed assets

Harmonizing to statistical pattern and accounting statute law, merely the goods that are used more than one twelvemonth and have a higher stock list value, of a certain ceiling value, are considered touchable fixed assets.

More specifically, the Order of the Ministry of Public Finances no. 3055/2009 sing the blessing of accounting Regulations in conformity with the European directives, defines touchable fixed assets as “ assets held by an entity in order to be used in the production of goods and services, to be rent to 3rd parties or to be used in administrative intents, for more than one twelvemonth. ”

In footings of value, as required by jurisprudence ( HG 105/2007, get downing with 12.02.2007 ) , touchable fixed assets are those goods that have an stock list value higher than 1800 wreath ( RON ) and a life-time more than one twelvemonth ( harmonizing to Law 15/1994 completed and updated ) .

Tangible fixed assets are non-financial assets including: homes, other edifices ( industrial edifices, commercial edifices, hotels and eating houses, edifices for instruction, infirmaries etc. ) , constructions ( main roads, roads, railroads, landing fields etc. ) , machinary and equipments ( transit equipments, broadcast medium and communicating equipments, medical instruments, furniture, musical instruments aso. ) , plantations and animate beings.

After 1990, exactly get downing with 1992, touchable fixed assets were revaluated harmonizing to the specific statute law, and since 1994 the value of lands belonging to the socio-economic units has been included in the value of touchable fixed assets.

The chief information beginnings for finding the touchable fixed assets are:

the balance sheets of the economic operators, societal and cultural units, units of corporation, political and public organisations, centralized at national degree, by assorted features ;

statistical studies and researches.

The statistical word picture of touchable fixed assets, the chief constituent of the national wealth, requires the computation of indexs that can foreground their entire value, their construction harmonizing to different features, their physical status, their motion and their serviceability.

Statistical indexs of Tangible fixed assets must be calculated on the entire national economic system, on activities of the national economic system ( harmonizing to NACE Nomenclature ) , on classs of Tangible fixed assets and types of belongings.

In order to find the value of Tangible fixed assets it is necessary to measure them and this rating is achieved through: current monetary values and comparable monetary values.

Tangible fixed assets can be formulated by:

the initial value or the stock list ( the value from the balance sheet, which is determined when Tangible fixed assets are brought into usage ) ;

the replacing value ( the current value of reproduction ) ;

the remained value ( the difference between the initial or replacement value and their depreciation ) .

The initial, replacing or remained value represents minutes or stock indexs.

In the economic analysis for finding the efficiency or profitableness indexs, the value of Tangible fixed assets correlates with indexs of consequence ( Gross Domestic Product, Net Domestic Product, National Income, Turnover etc. ) , which are watercourse or interval indexs, mentioning to a period of clip, normally one twelvemonth. This is why for Tangible fixed assets it is necessary to cipher an interval index, represented by the one-year mean value ( ) :

where: VIt – monthly stock list value of touchable assets.

Tangible assets ‘ construction indexs

A really of import facet in the analysis of Tangible fixed assets is their construction that highlights the entire portion of assorted groups.

The construction of Tangible fixed assets harmonizing to the characteristic, on which their grouping is made, is calculated utilizing the undermentioned expression:

where Fi represents groups of touchable assets, created after certain characteristics.

The chief standards ( features ) on which the grouping of touchable fixed assets is made are:

activities of national economic system, harmonizing to NACE terminology ;

types of ownership ;

types of touchable fixed assets ( lands and edifices, proficient equipments and machinery, other equipment, installations and furniture, touchable fixed assets in advancement )

Physical status ‘s indexs of touchable assets

The depreciation index ( Iuz ) is calculated as a ratio between the depreciation of touchable fixed assets ( the degree of amortisation ) and their stock list value at a certain clip:

where:

Uz – depreciation ( the degree of amortisation )

VI – stock list value

The public-service corporation position index ( Isut ) is calculated as a ratio between the remained value of touchable fixed assets and their stock list value at a certain clip:

Isut=100 – Iuz

where: VR – the remained value

Tangible fixed assets ‘ dynamic indexs

The kineticss of touchable fixed assets compares their value in nominal or existent footings at two different minutes in clip, 1 and 0.

The nominal kineticss of touchable fixed assets ( IF ) is calculated on the relationship:

The existent kineticss of touchable fixed assets ( IFR ) is calculated on footings of comparison, based on the monetary values index of touchable fixed assets harmonizing to the relationship:

or

where

The construction and kineticss of touchable fixed assets are reflected in a papers entitled The balance of touchable fixed assets ( Table 1 ) .

The Balance is an accounting papers at the degree of economic operator, establishment and statistically at meso-economic and macroeconomic degrees.

Tabel 1 The balance of touchable fixed assets

Existing at the beginning of the twelvemonth

F0

Input signals

Investings

Transportations

Re-evaluation

I

End products

Taking of service

Transportations

Re-evaluation

Tocopherol

Existing at the terminal of the twelvemonth

F1

Entire touchable fixed assets

by classs

by NACE activities

by type of ownership

Based on this balance, beside the kineticss indexs antecedently presented, it can be analysed the motion of touchable fixed assets by utilizing the equilibrating expression:

F1 = F0 + I- E

where: I – inputs E – end products

The moral force of touchable fixed assets must be carried out in footings of comparison and it is determined by their motion between minute 0 and 1.

Specific indexs of touchable fixed assets

A series of specific indexs can besides be calculated on the footing of this balance:

The index of regenerating the touchable fixed assets represents the ratio of new touchable fixed assets, commissioned during the twelvemonth, expressed in stock list value, in entire value of touchable fixed assets bing by the terminal of the twelvemonth, besides expressed in stock list value.

The index of taking of service the touchable fixed assets represents the ratio of the stock list value of touchable assets, removed from service during the twelvemonth, in entire value of touchable fixed assets bing at the terminal of the twelvemonth, besides expressed in stock list value.

The development of touchable fixed assets in Romania

After 1990, the kineticss of touchable fixed assets in Romania has been an go uping one, clearly influenced by the kineticss of different sectors of economic system, the kineticss of monetary values, and by and large by the development of the economic system.

In this period there were legion alterations associating to the computation methodological analysis of touchable fixed assets that affected the content, the coverage, the construction by activities of national economic system, by classs, the value saying. Unfortunately this influenced the comparison of the series of statistical informations.

Therefore, experts frequently refer to assorted ad hoc analysis processs in their analysis of touchable fixed assets, every bit good as of all value indexs, during a long period of clip. Therefore taking into history the legion methodological alterations, the kineticss of touchable fixed assets can non be presented as a unitary development for the full period, but fragmented into three sections ( Figure 1 ) .

twelvemonth 1990=100

twelvemonth 2000=100

twelvemonth 2008=100

Data beginning: Rumanian Statistical Yearbook, , edition 2011, Chapter Investments and touchable fixed assets, National Institute of Statistics, Bucharest, 2012

Fig. 1 The entire kineticss of touchable fixed assets in Romania, during 1990-2010 ( % )

The first period is 1990-1999, at the terminal of which the entire value of touchable fixed assets was 2.5 higher than 1990 ‘s degree, the addition being more pronounced in 1998 and 1999.

The undermentioned period, 2000-2007 maintained the old period ‘s tendency of addition, the value of touchable fixed assets in 2007 being 2.4 higher compared to 2000. But the beat of addition is more watchful, except for 2004 when a lessening was recorded, comparing to the old twelvemonth.

The last period 2008-2010 is clearly different from the other two, with a much slower addition, the degree of touchable fixed assets in 2010 being merely with 6.8 % higher compared to 2008 and dropping by 3.4 % compared to 2009.

Obviously it ‘s about the influence of the planetary economic crisis, started by the terminal of 2008 that clearly affected Romania excessively.

Further, in the analysis of the degree, kineticss and construction of the touchable fixed assets in Romania we have merely elaborated the period after 2008, for two grounds:

the first ground is that get downing from January 1st, 2008, in order to sort indexs on activities, they turned to version NACE Rev.2, which has many differences for the bulk of activities compared to the old version NACE Rev.1, and the comparing with old periods would be irrelevant ;

The 2nd ground is that at the terminal of 2008 the planetary economic crisis started and its effects are besides obvious in our state ‘s instance.

Therefore, in nominal footings, at the terminal of 2010 the value of touchable fixed assets in Romania was 1563.6 billion wreaths, with 16.1 % higher than the terminal of 2008.

But in existent footings, as we antecedently noticed, the addition of touchable fixed assets in this period was merely 6.8 % . The kineticss of touchable assets, both in nominal and existent footings, is presented in table 2.

Table 2 The kineticss of touchable fixed assets in Romania, during 2008-2010

– % –

Indexs

2008

2009

2010

Dynamic index

twelvemonth 2008 = 100

– noun phrase

100,0

110,2

116,1

– existent

100,0

110,2

106,8

Dynamic index

old twelvemonth = 100

– noun phrase

100,0

110,2

105,4

– existent

100,0

110,2

96,9

Data beginning: The informations are calculated based on Rumanian Statistical Yearbook, edition 2011, Chapter Investments and touchable fixed assets, National Institute of Statistics, Bucharest, 2012

The information about a concatenation based kineticss ( the old twelvemonth = 100 ) stress the different kineticss of 2009 and 2010, the effects of the crisis being felt more strongly in 2010 when there is a lessening of 3.1 % of the value of touchable assets, compared to 2009.

Harmonizing to the construction by activities of the national economic system, the state of affairs of touchable fixed assets during the analyzed period ( table 3 ) shows that the largest portion is held by industry, with over 40 % , but dropping by 3.8 % compared to 2008.

Public disposal is 2nd in topographic point as portion of entire fixed assets, with approximately 30 % , portion that additions by 7 % in the analyzed period.

Among the highlighted activities, instruction has the lowest per centum of entire touchable assets, with less than 1 % , every bit same as wellness, that is about in the same state of affairs.

Table 3 The construction of touchable fixed assets in Romania, on national economic system activities, during 2008-2010

– % –

Indexs

2008

2009

2010

Entire

100,0

100,0

100,0

Agribusiness, runing and forestry

1,9

2,3

1,8

Industry

44,5

41,7

40,7

Construction

4,9

5,5

4,3

Trade

6,1

5,8

5,5

Conveyance and storage

4,3

4,2

2,9

Hotels and eating houses

1,1

1,1

1,1

Public disposal and defense mechanism, societal insurance of public sector

27,7

31,1

34,7

Education

0,1

0,04

0,03

Health and societal aid

0,2

0,2

0,2

The others activities

9,2

8,1

8,8

Data beginning: The informations are calculated based on Rumanian Statistical Yearbook, edition 2011, Chapter Investments and touchable fixed assets, National Institute of Statistics, Bucharest, 2012

Therefore, merely two activities own about two tierces of all touchable fixed assets, fact that is besides illustrated by the in writing representation ( figure 2 )

Data beginning: The informations are calculated based on Rumanian Statistical Yearbook, edition 2011, Chapter Investments and touchable fixed assets, National Institute of Statistics, Bucharest, 2012

Fig. 2 The construction of touchable fixed assets in Romania, on national economic system activities, in 2010 compared to 2008

Analyzing the construction of touchable fixed assets on industrial activities we notice that the highest portion is that of the excavation industry with about 60 % of the entire value of assets and that the fabrication industry owns less than 25 % ( table 4 ) .

Table 4 The construction of touchable fixed assets in Romania, on national economic system activities, during 2008-2010

– % –

Indexs

2008

2009

2010

Entire industry

100,0

100,0

100,0

Mining

60,2

58,6

57,5

Manufacturing

26,8

27,4

27,5

Electricity, gas, steam and airconditioning production and supply

11,5

12,4

13,1

Water supply ; sewage, waste direction and decontamination activities

1,4

1,7

1,9

Data beginning: The informations are calculated based on Rumanian Statistical Yearbook, edition 2011, Chapter Investments and touchable fixed assets, National Institute of Statistics, Bucharest, 2012

As respects the structural alterations, they are non major but reveal a diminishing tendency of the entire portion of touchable fixed assets in the excavation industry, while there is an addition in the other industrial activities.

By signifiers of ownership, at the terminal of 2010, 64.5 % of the sum of touchable fixed assets was bulk province belongings and 35.5 % private bulk, the state of affairs being similar during the analyzed three old ages ( figure 3 ) .

Data beginning: The informations are calculated based on Rumanian Statistical Yearbook, edition 2011, Chapter Investments and touchable fixed assets, National Institute of Statistics, Bucharest, 2012

Fig. 3 The construction of Tangible fixed assets in Romania, on national economic system activities, in 2010

The analysis of the motion of touchable assets, viz. the bing at the beginning and the terminal of twelvemonth ‘s, the inputs and end products, is made on the footing of the Balance of touchable fixed assets ( Table 5 ) .

The balance of touchable fixed assets high spots both their kineticss and construction. Therefore, in nominal footings we notice an increasing kineticss of inputs, particularly in 2009 when, as a effect to the start of the economic crisis, the value of inputs was less than half diminished compared to 2008, the same tendency being maintained besides in 2010, even though it is attenuated as beat and an increasing kineticss of end products.

Table 5 The balance of touchable fixed assets in Romania, during 2008-2010

Lei million current monetary values

Old ages

Existing at the beginning of the twelvemonth

Input signals

End products

Existing at the terminal of the twelvemonth

2008

890331,5

613850,9

157563,0

1346619,4

2009

1331912,2

285134,4

133476,2

1483570,4

2010

1454158,2

279931,6

170459,0

1563630,8

Data beginning: Rumanian Statistical Yearbook, edition 2011, Chapter Investments and touchable fixed assets, National Institute of Statistics, Bucharest, 2012

Based on the balance we can find the inputs and outputs coefficients of touchable fixed assets, which in this instance are the undermentioned ( table 6 )

Table 6 The inputs and outputs coefficients of touchable fixed assets in Romania, during 2008-2010

%

Old ages

The inputs coefficient

The end products coefficient

2008

45,6

17,7

2009

19,2

10,0

2010

17,9

11,7

Data beginning: The informations are calculated based on Rumanian Statistical Yearbook, edition 2011, Chapter Investments and touchable fixed assets, National Institute of Statistics, Bucharest, 2012

We note that in 2008 the highest degree of input coefficient was recorded, of 45.6 % , while in the undermentioned two old ages the input per centum dropped at less than 20 % .

Besides, 2008 records the highest value of end products, 17.7 % and 2010 records an end product per centum about of 10 % .

Decisions

The analysis of touchable fixed assets at macroeconomic degree represents a really of import attack in naming the economic potency of a state. The methodological alterations recorded after 1990, mentioning to the touchable fixed assets and by and large to the value indexs, make this attack rather hard to accomplish under comparison conditions for longer periods of clip.

However, although we fragmented the periods of analysis, we could still foreground the manifested tendencies in the kineticss of touchable fixed assets in Romania, during the post-December period.

One can clearly notice three distinguishable periods: the first two, 1990-1999 and 2000-2007, with an go uping development and a tendency of increasing the beat of growing during the 2nd period and the period 2008-2010 when the kineticss of touchable fixed assets becomes about additive, with a tendency of lessening.

Due to methodological issues we detailed merely the period 2008-2010 when we highlighted the negative consequence of the economic crisis, triggered by the terminal of 2008, which well slows down the beat of addition in 2009 and aggravates it in 2010.

Structurally, the highest per centum of touchable fixed assets belongs to the province bulk sector ( over 60 % ) , about 40 % is found in industry and about 30 % belongs to the public disposal and defense mechanism activities.

In industry, more than 50 % of the touchable fixed assets are found in the excavation industry, while the fabrication industry owns merely a one-fourth of the entire touchable fixed assets if the industry.

As respects the motion of the touchable fixed assets during 2008-2010, 2008 was the most active twelvemonth, the inputs stand foring about 45 % of the recorded value by the terminal of the twelvemonth and end products being about 17 % of the value at the beginning of the twelvemonth.

Of class, the analysis of touchable fixed assets would necessitate more elaborate attacks, but the deficiency of information and the trouble to compare the bing 1s determined us to brood merely on the presented facets that we consider to hold created a reasonably relevant image of this field.

Bibliografie

*** Rumanian Statistical Yearbook, , edition 2011, Chapter Investments and touchable fixed assets, Methodological notes, National Institute of Statistics, Bucharest, 2012

*** HG nr. 105/2007 privind stabilirea valorii de intrare a mijloacelor fixe

*** Legea nr. 15/1994 privind amortizarea capitalului imobilizat in active corporale Si necorporale

*** Ordinul Ministerului FinanA?elor Publice nr. 3055/2009 pentru aprobarea ReglementA?rilor contabile conforme copper directivele europene

Anghelache, C. , Capanu, I. , – StatisticA? macroeconomicA? , Editura EconomicA? , BucureAYti, 2004

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Impactul crizei economice asupra evoluA?iei imobilizA?rilor corporale in Romania

Rezumat

ImobilizA?rile corporale reprezintA? principala componentA? a avuA?iei naA?ionale, constituind baza materialA? pentru desfA?AYurarea oricA?rei activitA?A?i economico-sociale. CunoaAYterea informaA?iilor referitoare la volumul AYi structura imobilizA?rilor corporale, la starea de utilitate, la nivelul tehnologic Al acestora, este esenA?ialA? pentru asigurarea unui direction corespunzA?tor, attention sA? conducA? La eficienA?a AYi calitatea proceselor economice AYi sociale. In acest context, lucrarea abordeazA? o serie de aspecte teoretice official emissary de imobilizA?rile corporale AYi prezintA? evoluA?ia principalilor indicatori blare domeniu, in Romania, dupA? anul 1990, insistand in particular asupra perioadei 2008 – 2010 pentru a evidenA?ia influenA?a negativA? a crizei economice globale, declanAYate la finele anului 2008.

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