Charter Assets

in the USSR, the resources allotted free by the state to a socialist state production enterprise (association). The charter assets are the principal source of the enterprise’s resources, providing both the fixed capital stock and the working capital. A large part of the assets, approximately four-fifths in the case of industry, goes to fixed capital stock.

The initial amount of the assets is determined by the charter of the enterprise (association) or is set forth in the document that establishes the enterprise. Once the enterprise is in operation, the amount of the assets may be altered through supplementary allotments or withdrawals of capital. Changes in the amount of the assets during the course of the year are made only in cases defined by law. The main factors occasioning an increase are capital investment ordered by central planning agencies, the introduction of new fixed capital stock (from industrial development funds), capital repair and modernization, and the replenishment of working capital. The assets may also be increased as a result of the replenishment of working capital from state budgetary allocations, the enterprise’s profit, or the resources of higher bodies through redistribution and revaluation of inventories and certain other assets in accordance with a decision by government agencies. The assets are decreased when part of the fixed capital stock or working capital is withdrawn from the enterprise by higher bodies without compensation. They are also lowered through wear and depreciation of assets, decreases in the price of inventories and stocks, and any irredeemable losses incurred by the enterprise. The sale (purchase) of unused equipment and raw materials and other supplies will increase (decrease) the total resources of the assets.

Fluctuations in the amount of the charter assets is reflected in special accounts and in the annual report of enterprises. The total sum of the assets at the beginning and end of the accounting period, shown on the liabilities and net-worth side of the balance sheet of the enterprise (association), corresponds to the book value of the fixed capital stock plus working capital.