THE TASKS OF THE FIXED ASSETS REPRODUCTION MANAGEMENT SUBSYSTEM AT AN ENTERPRISE IN MODERN ECONOMY

• Main Author: O. Poluianova
• Format: Article
• Language: English
• Published: LLC "CPC "Business Perspectives" 2014-03-01
• Series: Економіка розвитку
• Subjects: reproduction; fixed assets; management; capitalization; investment attractiveness; depreciation; subsystem
• Online Access: http://www.ed.ksue.edu.ua/ER/knt/ee141_69/e141pol.pdf
• ISSN: 1683-1942; 2304-6155

Fixed assets of enterprises are the most important part of the national wealth in any country. Their condition is the most important factor of the economic development of the state. According to the data of the Ministry of Statistics of Ukraine, depreciation of fixed assets reached 74.9 % by the end of 2010. This is due to the fact that far from all of the enterprises set up systems of fixed assets reproductivon management. Quite often the replacement of obsolete equipment is made spontaneously and there are no plans on replacing the obsolete equipment. The process of fixed assets reproduction is part of the production process and its management should be carried out in complex cooperation with management of all other enterprise's subsystems. A standard model of the fixed assets reproduction process at enterprises is characterized by three features of fixed assets reproduction: cyclicity; simultaneity of advances and gradual depreciation, availability of two groups of funding sources for reproduction – internal and external. The third feature involves capitalization of the resources invested in the reproduction of fixed assets. An adaptive model of the reproduction process of the enterprise's fixed assets on the principles of capitalization makes it possible to manage the business processes so as to achieve increased market capitalization. The organizational part of the model provides an implementation of management decisions, and the economic one is responsible for creating the adequate financial resources for their implementation. In the process of production physical deterioration of fixed assets takes place, which may be offset by the amount of depreciation charges, if the wear compensation cycle operates in the normal mode. It may also be expanded at the capitalization cycle under the business profitability conditions and at the expense of external income. But it is impossible to compensate obsolescence. Based on different authors' approaches to the fixed assets reproduction management it is proposed to consider it in terms of an appropriate investment mechanism. This approach allows the use of a variety of internal and external mechanisms of enterprise control in their mutual relation and balance, using the tools of financial, investment, depreciation, price and tax policies in the investment and technological, organizational and production subsystems. A list of problems to be solved through the investment mechanism of fixed assets reproduction is defined. These problems include: ensuring the effective use of the available fixed assets, control of the rhythm of flows in the context of wear compensation, ensuring smooth operation and optimization of deductions from profits on capitalization, management of the scientific and technical progress for timely prevention and compensation of obsolescence, management of investment attractiveness in order to maximize the attraction of external income, management of the structure of financing investment in the enterprise fixed assets. Solving these problems is impossible without integrating information about the processes in the respective sub-systems of the enterprise management system.