Summary

Land resources are a unique object of accounting, which necessitates the development of an accounting system as well as land valuation approaches. Changing the economic content of land resources as an accounting object, and expanding the list of economic transactions carried out with land resources necessitate the establishment and further improvement of methodological approaches to their assessment. Implementation of European integration processes in the reform of the accounting system actualises the issue of rethinking the essence of land resources assessment, changing the understanding of its role in the economic environment of the business operation.

The methodological principles for the formation of information on land resources in accounting are determined by the regulations of the land legislation and national provisions on accounting (accounting standards). Land resources are recognized as an asset if there is a probability that the enterprise will receive future economic benefits from their use and their value can be credibly determined. That is, determining the correct and credible assessment of land resources is one of the key preconditions for the recognition of land resources as an asset.

The land assessment, depending on the purpose and methods of carrying out, is divided into the following types: soil cultivation, economic evaluation of land resources, monetary valuation of land plots, divided into normative and expert monetary valuation of land plots. As a result, the main drawbacks of the application of normative monetary valuation of land plots have been established. It is determined that the expert monetary valuation of land plots is based on the following methods: a method based on the capitalization of net operating or rent income; a method of comparing sales prices of such land plots; method of taking into account the costs of land improvements. On the basis of the study of the essence of these methods and the specifics of their use, the advantages and disadvantages of their application for assessing land resources have been established.

Initial assessment of land resources, depending on how they are received by the enterprise, can be carried out using the initial value and fair value. Determination of the fair value of land resources in the initial assessment is carried out by the estimating entity and assessment results are described in the assessment report.

We believe that, as of the balance sheet date, the assessment of land resources can be carried out using the following approaches:

– fundamental (provides for an initial assessment of land resources as of the date of receipt and as of the balance sheet date at true value);

– market (involves initial assessment of land resources as of the date of receipt and as of the balance sheet date at fair value);

– alternative (involves initial assessment of land resources as of the date of receipt, with subsequent revaluation and as of the balance sheet date).

When using an alternative approach to land resources assessment as of the balance sheet date, a revaluation is to be performed on the basis of the report of the estimating entity. Subsequently, land inventories are maintained at reassessed value and the reassessment should be performed with such regularity that, as of the balance sheet date the reassessed value would not significantly differ from the fair value. We believe that the use of the alternative approach is the most appropriate for business entities in the current realia of the land market functioning. The algorithm for using an alternative approach to land resources assessment is proposed.

The use of the alternative approach to establishing fair value of land as of the balance sheet date will contribute to ensuring the reasonable showings of the land resources cost set forth in the balance sheet. Providing credible information about the cost of land resources will allow protection of the property interests of accounting information users of and investors.