FEATURES OF IMPLEMETATION OF THE DEPRECIATION POLICY OF THE CORPORATION AT THE CURRENT STAGE

Abstract

This article examines that depreciation policy is one of the most crucial tools for encouraging investments in the renewal of fixed production assets in many developed countries, where the economy is characterized by innovative activity. Such innovative activity and high-tech advancements could become a competitive advantage for Ukrainian corporations, making the stimulating nature of depreciation policy a vital tool for development. Depreciation policy is shaped both at the state level and the corporate level. At the state level, it is implemented to encourage investment activity and the renewal of fixed assets (FA) within organizations, aiming to increase organizational flexibility in choosing depreciation methods (such as accelerated depreciation or non-linear methods) and to shorten the useful life of FA in tax accounting. Meanwhile, corporate depreciation policy is designed to accelerate the renewal of material and technical bases through the accumulation of sources for simple and expanded reproduction of FA and the optimization of tax payments. Corporate depreciation policy can be viewed as a combination of rational economic mechanisms and tools aimed at accumulating depreciation resources for reinvestment in FA reproduction. The primary functions of corporate depreciation policy include calculating depreciation, revaluing fixed assets, optimizing property taxation, and accumulating and purposefully utilizing depreciation charges. The main objective of depreciation policy is to ensure the regular accumulation of funds necessary for replacing or restoring depreciated capital assets. These accumulated funds form a depreciation fund, which can be used for technical upgrades and reconstruction, serving as a financial base for expanded reproduction and organizational development. The choice of depreciation methods within a corporation depends on its overall economic strategy, with different approaches emphasizing various objectives such as maximizing net profit, minimizing tax liabilities, or ensuring the preservation of physical capital. In Ukraine, corporations mostly use methods defined by the Tax Code of Ukraine, with the straight-line method being the most common. The analysis of PJSC "Obolon," a major Ukrainian brewery, shows that while the company primarily uses the straight-line method, the adoption of accelerated depreciation could significantly benefit the organization by allowing for faster asset renewal, which is particularly relevant given the high wear and tear of Ukraine’s FA. Given the critical condition of Ukraine’s production assets, there is an urgent need for measures to improve corporate depreciation policies, particularly by adopting accelerated depreciation methods. In conclusion, improving corporate depreciation policies is essential as it is a key lever for renewing production assets, enhancing the technical level of production, and ensuring the economic security of the country. For PJSC "Obolon," the adoption of accelerated depreciation is recommended to address the current challenges and ensure more effective asset utilization.