Improvement of accounting depreciation of non-current assets computed by the units of production method in mining
Introduction. Methods of depreciation of non-current manufacturing assets based on the indicator of their expected lifespan do not fairly link the amounts of depreciation to the finished product. Also, they do not take into account the pace of operations and are inconsistent with the fundamental matching principle in accounting, which leads to unfair depreciation. This problem is reinforced due to the incorrect definition of the finished product from the perspective of its relevance to non-current manufacturing assets in use. Purpose. The research is focused on the improvement of accounting for basic data and advances in the units of production method used for computing depreciation amounts related to non-current manufacturing assets at mining enterprises. The proposed improvements and advances are expected to contribute significantly to solving the problem of unfair depreciation. Results. To solve the problem of unfair depreciation of non-current manufacturing assets at the mine, it is suggested to account extracted rock mass as a finished product. Furthermore, specific accounts for minerals and waste rock should be included into the chart of accounts. The researchers suggest ways to improve the units of production depreciation method applied with regard to non-current manufacturing assets by assessing the value of assets used for the extraction of minerals and the value of the assets used for the extraction of the waste rock through a special ratio of minerals to the total rock mass. Conclusions. Accounting in mining corporations provides aggregation of information related to untagged coal only if they consist of mines without enrichment plants and untagged coal with concentrated coal if they consist of mines and enrichment plants. Methods used for depreciation relevant to the national and international accounting standards do not take into account specific conditions of extracting industry. To ensure fair depreciation of non-current manufacturing assets, the authors of the article have improved the units of production method by introducing a special ratio of the extracted minerals to the total rock mass. The improved method is expected to positively influence the accumulation of depreciation funds since it is more accurate and consistent with the real depreciation of non-current manufacturing assets. Further research will be focused on the development of methodology for the correct finding of non-current assets in mining, as well as improvements in accounting for non-current assets transmitted from one mine to another within a single mining corporation.