Fixed capital: structure, composition and features of functioning

The basic capital of the organization is part of productive, basic capital, which is repeatedly and completely involved in the reproduction of goods. It can also include the part of the cash flows that was spent on the construction of buildings, buildings, the acquisition of machinery, tools and equipment. After the goods are sold, the fixed capital will be returned to the entrepreneur in parts. Let's consider in more details features of its structure, structure and functioning.

The fixed capital is the cash flows that are invested in fixed assets. He changes his material form, passing a series of consecutive and interrelated stages:

1. Investing in real assets (structures, buildings, equipment, machinery, etc.), rather than in financial assets (bonds and shares).
2. Production of goods and consumption of resources. Development of a strategy for their implementation.
3. Gradual transfer of the value of labor in proportion to the moral and physical wear and tear on the produced product. To do this, special funds are used - depreciation charges, which include the costs of circulation and production.
4. Stage reimbursement, when the accrued depreciation begins to turn into a monetary expression (revenue and cost). Due to these funds, equipment is being purchased again and continuously updated.

This is the structure of fixed capital. But it can vary depending on the scope of the enterprise, its policies, strategic objectives and tactical tasks.

The structure of fixed capital includes:

1. Fixed assets, that is, such part of the property that is used as a means of labor in the process of production, performance of work or provision of services. These cash flows can be used to manage the company for a certain period, which must necessarily exceed twelve months. The structure of fixed assets also includes land plots and other that are owned by this organization. This is a monetary assessment of the PF and values that have a long period of service.
2. Unfinished investments with a long term include the costs of forming and increasing their size. In addition, they include such investments that were aimed at purchasing a system of non-current assets that were not intended for sale.
3. Long-term investments in valuable government securities, bonds and other, as well as in the authorized capitals of other organizations.
4. Intangible assets, which include copyrights to the result of intellectual activity. They also take into account the business reputation of the company and the system of organizational expenses (for example, related to the formation of a legal entity, registration of authorized (share) capital, etc.).

Fixed capital includes also:

1. Buildings as one of the types of funds, including a system of architectural and construction facilities. Their basic purpose is to create conditions for housing, labor and social and cultural services for employees, as well as the preservation of material values.
2. Facilities as infrastructure objects necessary for optimal maintenance of the production process.
3. Power and working equipment and machinery are a small part of the capital that is used in the production of goods.
4. Regulating, measuring devices and devices, and also computer facilities.

The fixed capital must be formed in accordance with its specifics, policies and objectives. However, to achieve them in the situation of the modern market, a constant adjustment of this process is necessary.