The deflator index is an economic indicator used to recalculate the value of property of enterprises.
From the point of view of
macroeconomic indicators, it is used to adjust the value of GNP (gross national product) taking into account price changes. The GNP deflator is formed taking into account the funds expended by the state for the purchase of raw materials and industrial goods, as well as taking into account the funds received from the
sale of goods and services on the world and domestic market. When comparing these indicators, the deflator index is formed, which, depending on changes in prices, also changes.
In general, the term "deflator" implies several definitions:
-GD Deflator (INTERNAL GROSS PRODUCT) is used to determine the actual prevailing prices in the domestic market of the country, based on the calculation of the price index.
-GNP deflator (GROSS NATIONAL PRODUCT) is determined as an index by the ratio of the indicators of the previous year to the current.
-Income (price) deflator - an indicator of the price level in relation to the current year to the previous one.
The deflator index, according to the decision approved by the Government of the Russian Federation, is set for the calendar year, based on the calculation of the current year price increase.
In the Russian economy, the deflator index began to be used since 1996 as an indicator of weighted average prices for property of enterprises (fixed assets, tangible assets, current assets).
To calculate the deflator index, a joint instruction was developed by the State Statistics Committee of the Russian Federation, the Ministry of Finance of the Russian Federation, and the Ministry of Economy of the Russian Federation, approved on 05.21.96. Its application is directly related to the determination of the tax base of corporate income tax. At that time, in connection with the crisis of the Russian economy, inflation was growing at a high speed, so the conversion indices were made quarterly.
Recalculation of the value of assets, for example, fixed assets, is carried out sequentially taking into account changes in the deflator index. If, for example, an object was acquired in January 1996, and was disposed of for sale at the end of the same year, then the residual value of this object will be adjusted for the corresponding deflator index. If the receipt and disposal of fixed assets took place in the same quarter, then recounting is not done. Profit from the sale of property can be determined by the formula:
P = CR - (BS x D,), where
P - profit from sales;
CR - sales price;
BS - book value;
D is the deflator index.
When selling property, there may not be any profit, i.e. its implementation may be equal to the carrying amount or lower. In this case, the conversion of the inflation rate is not applied. To revaluate the carrying amount of fixed assets, the deflator index began to be used in 1998.
Below is a table characterizing the degree of change
in inflation indicators over 4 years (1996-1999) quarterly.
year | 1st quarter | 2nd quarter | 3rd quarter | 4th quarter |
1996 | 113.3% | 108.3% | 105.2% | 103.5% |
1997 | 101.6% | 101.2% | 101.8% | 100.6% |
1998 | 102.5% | 102.3% | 103.9% | 107.2% |
1999 | 108.3% | 108.6% | 112.7% | 110.1% |
With these indicators in mind, a revaluation of the property of enterprises is carried out, except for securities, shares, intangible assets, and currency.
At a meeting of the Government of the Russian Federation dated October 1, 2008, the Concept of Long-Term Socio-Economic Development of the Russian Federation for the Period Until 2020 was considered, on the basis of which planning of long-term projects by enterprises in the field of construction and services takes place.