Improving the Procedure for Presenting Non-Current Assets in Financial Statements

The study of this article examines the theoretical and methodological aspects of improving the classification and presentation of non-current assets in financial statements. Attention is paid to distinguishing property, plant and equipment from investment property according to their economic substance rather than merely their legal form, ownership status, inventory number, or accounting title. The study analyses the approaches of foreign and local researchers, as well as the requirements of IAS 16 “Property, Plant and Equipment” and IAS 40 “Investment Property.” Based on the research findings, a five-stage methodology for classifying non-current assets is proposed. The methodology considers the source and form of expected economic benefits, the purpose and duration of asset use, associated risks and control, residual value, and disposal opportunities. It also provides for documenting classification decisions, reviewing asset categories when their use changes, and reflecting relevant criteria in the entity’s accounting policy. The proposed approach helps distinguish property, plant and equipment from investment property more accurately, select appropriate measurement and depreciation methods, reduce subjectivity in accounting decisions, and improve the reliability, transparency, relevance, and comparability of financial statement information.