Püsivarade

Püsivarade is Estonian for fixed assets, referring to non-current assets held by a business for use in operations over more than one accounting period and not intended for sale in the ordinary course. On the balance sheet, püsivarade are typically presented as non-current assets and support ongoing production or administrative activities.

Classification commonly includes tangible assets such as land, buildings, machinery, vehicles, office equipment, and furniture. Intangible assets, like software licenses and development costs that meet capitalization criteria, may also be included depending on the entity’s accounting policy.

Recognition and measurement: Püsivarade are initially recognised at cost, comprising the purchase price plus directly attributable costs needed to bring the asset to working condition. After recognition, they are measured using either the cost model (cost minus accumulated depreciation and impairment) or the revaluation model (fair value at revaluation date minus subsequent depreciation). The choice of model depends on applicable accounting standards and policy.

Depreciation and amortization: Most püsivarade (except land) are depreciated over their estimated useful lives, systematically allocating cost to expense. Amortization applies to intangible püsivarad with finite lives. Useful lives and residual values are reviewed periodically and adjusted if necessary.

Impairment: If indicators of impairment arise, püsivarade are tested for recoverable amount. If the recoverable amount is below carrying value, an impairment loss is recognised to reflect the asset’s diminished value.

Disposal and derecognition: When a püsivarad is disposed of or retired, its carrying amount and accumulated depreciation are removed from the records. Any resulting gain or loss is recognised in the income statement.

Context: In Estonia, the accounting treatment of püsivarade follows national standards and the applicable financial reporting framework, with practices aligning to broader concepts of property, plant and equipment in financial reporting.