Industrial Plant Valuation for C-6 and C-15

Industrial Plant Valuation for C-6 and C-15

The National Standards Applied in the Valuation of Fixed Assets (C-15 and C-6)  

What is NIF C-6?

The objective of the standard is to identify the commercial value of property, plant and equipment assets, which is also known as fixed assets, so it can be divided into disclosure, presentation and valuation standards that can be general or specific. 

This standard takes into account different aspects among which are:

• • General rules that refer to casualties, as well as depreciation and deterioration of assets. 

• • Items found in the initial cost of assets and modifications. 

• • The accounting treatment of the main points. 

• • The exchange that exists of the assets and other considerations that are taken at the time of the acquisition. 

• • Net worth on the books. 

• • Charges for depreciation and impairment losses. 

What is the object of property, plant and equipment? 

In the case of property, plant and equipment, all those assets that are of a tangible nature are considered and for this reason they are for the use or usufruct of the assets for the benefit of the entity, these items can be produced for sale or use by the entity. and they are also assets that allow the entity to provide services to its customers or to the general public. 

What is NIF C-15?

This standard is applied to the valuation of those assets that are considered long-term for a company, so they can be tangible or intangible assets and are considered essential assets for the operation of an organization in the long term. 

These long-lived assets are those that are essential for an entity to operate properly and provide future economic benefits, so they can be considered operating and corporate assets. 

What are the operating and corporate assets? 

Operating assets are those that have a long life and help the business generate cash flow, while corporate assets are necessary for the business to be operating but do not themselves generate cash flow. 

Corporate assets must be part of the same economic entity even if they are in different legal entities and within these may include computer equipment, corporate buildings and centers used for research and development.

The assets that are valued within the industrial plant valuation NIF C-6 and NIF C-15

Land, buildings, machinery, production equipment, transportation equipment, computer equipment, tool (depends on useful life, may be classified as a separate component), molds, dies, asset sharing, restaurant operating equipment (glassware) is not recommended due to the difficulty involved in having control, since it tends to break easily.

Types of assets that do not apply

Does not apply when property, plant and equipment is classified for sale, biological assets related to agricultural activities, assets for exploration and evaluation of mineral resources.

NIF C-15 (Applications):

• • Long-lived assets (tangible or intangible)

• • Long-lived assets recorded as capitalized leases by the lessee

• • Long-lived assets in operating contracts with the lessor

• • The assets and obligations (liabilities) associated with a formal plan by the entity to discontinue an existing activity

Does not apply for

• • Financial instruments

• • accounts receivable

• • inventories

• • Deferred tax assets

• • Pension fund

• • Assets manufactured by a contractor