1. The concept of depreciation, depreciation deductions
During operation, OS wear out. There are moral and physical depreciation of the OS.
Obsolescence- this is a partial loss of OS of their consumer value under the influence of technological progress and improvement of the production process.
Physical deterioration- loss of OS of their original technical and operational qualities.
Physical depreciation is subject to accounting.
The cost of fixed assets is repaid through depreciation. Depreciation- this is the inclusion in the production costs of the worn out part of the OS.
Depreciation is not charged on:
Objects housing stock, except for those leased and included in profitable investments into material values;
Land plots and objects of nature management;
Library funds;
OS objects of non-profit organizations;
Objects assigned to museum collections.
Depreciation deductions for an item of fixed assets begin on the first day of the month following the month of commissioning and acceptance of this item for accounting, and are charged up to full repayment the value of this object or write it off from accounting.
The accrual of depreciation on the object is terminated from the first day of the month following the month of the full repayment of the cost of the object or its write-off from accounting.
Depreciation of fixed assets is calculated taking into account the following factors:
- original cost;
- term beneficial use each type of fixed assets;
- depreciation method.
The useful life of fixed assets is determined when they are registered on the basis of:
The expected life of the facility in accordance with the expected performance or capacity;
Expected physical wear and tear, depending on the operating mode (number of shifts), natural conditions and the influence of an aggressive environment, the repair system;
Regulatory and other restrictions on the use of this object (for example, the lease term).
All depreciable property is divided into depreciation groups in accordance with its useful life.
Depreciable property is combined into the following depreciation groups:
Group 1 - all non-durable property with a useful life of 1 to 2 years inclusive;
Group 2 - property with a useful life of more than 2 years up to 3 years inclusive;
Group 3 - property with a useful life of more than 3 years up to 5 years inclusive;
Group 4 - property with a useful life of more than 5 years up to 7 years inclusive;
Group 5 - property with a useful life of more than 7 years up to 10 years inclusive;
Group 6 - property with a useful life of more than 10 years to 15 years inclusive.
Group 7 - property with a useful life of more than 15 years to 20 years inclusive.
Group 8 - property with a useful life of over 20 years up to 25 years inclusive.
Group 9 - property with a useful life of more than 25 years to 30 years inclusive.
Group 10 - property with a useful life of over 30 years.
2. Methods of depreciation in accounting. Depreciation procedure
Depreciation of fixed assets in accounting records is carried out in one of the following ways:
- linear - consists in uniform depreciation during the useful life of the object.
Example: OS - 30000 rubles, useful life - 5 years:
The annual depreciation rate will be 100% / 5 years = 20%
The annual depreciation amount will be 30,000 * 20/100 = 6,000 rubles
declining balance- is determined on the basis of the residual value of the OS object, taken at the beginning of each reporting year, and the depreciation rate calculated when registering the OS object, based on its useful life and the acceleration factor established in accordance with the legislation of the Russian Federation.
Example: OS - 30000 rubles, useful life - 5 years, liquidation value - 1000 rubles. The annual depreciation rate is 20%, and at accelerated depreciation equals 20%*2=40%
|
Period |
Annual depreciation amount |
Accumulated depreciation |
|
|
End of year 1 |
30000*40%=12000 |
12000 |
18000 |
|
End of year 2 |
18000*40%=7200 |
19200 |
10800 |
|
End of year 3 |
10800*40%=4320 |
23520 |
6480 |
|
End of year 4 |
6480*40%= 2592 |
26112 |
3888 |
|
End of Year 5 |
2888 |
29000 |
1000 |
Write-off based on the sum of numbers of years of useful life- is determined based on the initial cost of the fixed asset and the estimated coefficient.
Example: The initial cost of the object is 30000 rubles, the useful life is 5 liters:
The sum of the number of years of service life is 1+2+3+4+5=15
Amount of depreciation
In 1 year 30000*5/15=10000 rub
in the 2nd year 30000*4/15
in the 3rd year 30000*3/15=6000
in year 4 30000*2/15=4000
in year 5 30000*1/15= 2000
- method of calculating depreciation depending on the volume of output. With this method, the annual depreciation amount is determined by multiplying the percentage calculated as the ratio of its initial cost to the estimated volume of output or work for its useful life by the indicator of the actual volume of production or work performed for this period.
Example: the initial cost is 24000. The useful life is 5 years. Estimated production output - 120000:
24000/120000*100=20% - annual depreciation percentage
|
Period |
Actual output |
Annual depreciation amount |
Accumulated depreciation |
residual value |
|
1 year |
20000 |
20000*20%=4000 |
4000 |
20000 |
|
2 year |
25000 |
25000*20%=5000 |
9000 |
15000 |
|
3 year |
30000 |
30000*20%=6000 |
15000 |
9000 |
|
4 year |
35000 |
35000*20%=7000 |
22000 |
2000 |
|
5 year |
10000 |
10000*20%=2000 |
24000 |
3. Synthetic accounting and analytical accounting for depreciation of fixed assets
Accounting for depreciation of fixed assets is carried out on a passive, balance, regulating account 02 "Depreciation of fixed assets"
Credit balance - reflects the amount of accrued depreciation of all fixed assets of the enterprise and at the same time the amount of their reimbursed value through depreciation.
Debit turnover - the amount of accrued depreciation for the reporting period
Debit turnover - depreciation amounts for retired fixed assets.
Account 02 has two sub-accounts:
02.1 - "Depreciation of own fixed assets";
02.2 - "Depreciation of property leased."
The amounts of accrued depreciation of fixed assets are monthly included in the costs of production and circulation - D T 20.25.26.44 K T 02.
The write-off of the amount of accrued depreciation upon disposal of fixed assets is reflected in the posting D T 02 K T 01.
The amount of accrued depreciation on account 02 is the source long term investment into fixed assets, their reconstruction, technical re-equipment.
4. The procedure for calculating depreciation for tax purposes
The Tax Code of the Russian Federation provides for the use of two methods for calculating depreciation of fixed assets for tax purposes:
1. linear method - applied to buildings, structures, transmission devices included in depreciation groups 8-9, regardless of the period of commissioning of these facilities.
When applying the straight-line method, the amount of accrued depreciation for one month is determined as the product of its initial cost (replacement) cost and the depreciation rate determined for this object.
The depreciation rate for each item of depreciable property is determined by the formula:
K = 1 / n * 100%,
Where K is the depreciation rate as a percentage of the original cost,
n is the useful life, expressed in months.
2. non-linear method - the amount of monthly depreciation in relation to depreciable property is determined as the product of the total balance of the depreciation group and the depreciation rate determined for this group.
Since 2009, with nonlinear method depreciation must be calculated not for each object, but separately for each depreciation group according to the formula:
A \u003d B * K: 100,
Where A is the amount of depreciation per month for the corresponding depreciation group;
B - the total balance of the corresponding depreciation group;
K - depreciation rate for the corresponding depreciation group.
Depreciation rates by groups:
Group 1 - 14.3%
Group 2 - 8.8%
Group 3 - 5.6%
4 group - 3.8%
Group 5 - 2.7%
6 group - 1.8%
Group 7 - 1.3%
8 group - 1.0%
9 group - 0.8%
10th group - 0.7%.
Since depreciation must be calculated monthly, the total balance (value of property) must be determined on the 1st day of each month. The cost of purchased fixed assets will increase the total balance of the corresponding depreciation group from the 1st day of the month following the commissioning of the facility.
The total balance for each depreciation group must be reduced monthly by the amount of depreciation accrued last month:
January 1st - 100000*8.8:100= 8800, 100000 - 8800 = 91200
February 1 - 91200* 8.8: 100 = 8025.60, 91200 - 8025.60 = 83174.40 etc.
Details Category: Selections from magazines for an accountant Published: 23.09.2015 00:00Choosing a depreciation method
The selected depreciation methods must be fixed in the accounting company. At the same time, keep in mind that in accounting it is permissible to use different ways to different groups of homogeneous fixed assets. But it is not allowed to change the method of depreciation for a specific object after its commissioning. That is, during the entire useful life of the object, one method will have to be applied (clause 18 PBU 6/01 “Accounting for fixed assets”). In tax accounting, we note that it is possible to change the method of tax depreciation from the beginning of the year. At the same time, it is allowed to switch from a non-linear method to a linear one no earlier than five years after you started using it (paragraph 4, clause 1, article 259 of the Tax Code of the Russian Federation).
Possible methods for calculating depreciation of fixed assets in accounting
In accounting, depreciation of fixed assets can be calculated using one of four methods (clause 18 PBU 6/01 “Accounting for fixed assets”):
- linear way;
- reducing balance method;
- method of writing off the cost by the sum of the numbers of years of the useful life;
- method of writing off the cost in proportion to the volume of products (works).
Linear method in accounting
The main advantage of the straight-line method is its ease of use: the cost of an object is paid off evenly throughout its useful life. In addition, this is the only way to avoid temporary differences between accounting and tax accounting.
For depreciation accounting in a linear way, the annual rate is first determined by the formula:
Then calculate the annual depreciation amount using the formula:
The amount of depreciation that must be charged monthly is equal to 1/12 of the annual amount (clause 19 PBU 6/01 “Accounting for fixed assets”).
Note: the depreciation rate for the linear method in accounting and tax accounting is calculated differently. Namely, in tax accounting, the monthly rate is immediately determined. For this, the useful life of the object is taken in months. In accounting, the annual rate is first calculated (based on the useful life in years, not months) and, accordingly - annual amount depreciation. And only then in accounting displays the amount that is accrued monthly. It's 1/12 annual depreciation. Thus, taking into account these differences, due to rounding, the depreciation amounts calculated in accounting and tax accounting may differ. To avoid discrepancies, in accounting it is worth determining the indicator "Annual depreciation rate" with the maximum number decimal places (at least four).
An example of calculating depreciation using the straight-line method can be found in a special article.
Decreasing balance method
The advantage of the reducing balance method is that in the first years of operation, the fixed asset is depreciated faster than with the straight-line method. The disadvantage is that the period of full repayment of the value of the object exceeds its useful life - there remains a part of the cost of the fixed asset, the write-off procedure for which must be determined in accounting policy companies. This will be more clearly seen in the example below.
To calculate depreciation using the reducing balance method, first determine the annual depreciation rate using the formula:
After that, the annual depreciation amount is calculated using the formula:
Monthly amount depreciation is equal to 1/12 of the annual amount (clause 19 PBU 6/01 "Accounting for fixed assets").
Please note that since the residual value of an object is taken at the beginning of each year, the annual depreciation amount will gradually decrease. Accordingly, the amount of monthly depreciation will decrease. At the same time, the amount of monthly depreciation during the year remains unchanged.
The company sets the increasing coefficient to the depreciation rate on its own, prescribing a specific value in the accounting policy. It cannot exceed a factor of 3.0 (clause 19 PBU 6/01 "Accounting for fixed assets"). At the same time, the coefficient of 3.0 can only be applied for depreciation of fixed assets put into operation after December 31, 2005. For other fixed assets, multiplying factors must be applied, initially when they are put into operation (order No. 03-05-06-01/71 dated 12.12.2005, letter of the Ministry of Finance of Russia dated 06.22.2007 No. 03-05-06-01/71).
Declining balance calculation example
The organization purchased a laptop. The initial cost of the fixed asset, formed in accounting, is 45,000 rubles. The facility was commissioned in December 2014. Useful life - 3 years.
According to the accounting policy, in accounting, depreciation on laptops is calculated using the reducing balance method using a multiplying factor of 1.5.
This laptop has been depreciated since 2015. The residual value at the beginning of 2015 is equal to its initial value, since depreciation was not charged in 2014.
The annual depreciation rate is:
1: 3 x 100% = 33.3334%.
Payment depreciation charges for the useful life of the laptop is presented in the table:
Year of operation |
Residual value at the beginning of the year, rub. |
Depreciation rate, % |
The annual amount of depreciation deductions, taking into account the increasing coefficient, rub. (column 2 × column 3 × 1.5) |
Monthly amount of depreciation charges during the year, rub.
|
Residual value at the end of the year, rub.
|
|---|---|---|---|---|---|
According to the write-off of the residual value of the fixed asset, the accountant chose from two options:
Option 1. Write off the residual value of the object in accounts 02 in last month useful life.
Option 2. Continue to depreciate the object using the reducing balance method until the moment it is written off due to disposal (sale, obsolescence or physical deterioration, etc.).
Given the materiality of the amount of the balance, the accountant chose option 2.
Write-off method based on the sum of numbers of years of useful life
The advantage of depreciation by the sum of the number of years of useful life is that in the first years of operation the object is written off faster than with the straight-line method. In this case (unlike the reducing balance method), the maturity period coincides with the useful life.
Now for the calculation itself. An annual depreciation rate is not needed to write off the value of the sum of the numbers of years of useful life. To calculate depreciation in this way, the annual depreciation amount is immediately calculated using the formula:
The amount of depreciation that must be charged monthly is equal to 1/12 of the resulting annual amount (clause 19 PBU 6/01 “Accounting for fixed assets”).
An example of calculating depreciation by the sum of the numbers of years of useful life
The organization purchased a laptop. The initial cost of the fixed asset, formed in accounting, is 45,000 rubles. Set time useful life of the object - 3 years.
According to the accounting policy, in accounting, depreciation for laptops is calculated by writing off the cost by the sum of the numbers of years of the useful life.
The sum of the number of years of useful life of a laptop is equal to:
1 + 2 + 3 = 6 .
In the first year of operation of the facility, the annual depreciation amount will be:
3: 6 × 45,000 rubles. = 22 500 rubles.
The amount of monthly deductions is equal to:
22 500 rub. : 12 months = 1875 rubles.
In the second year of operation of the facility, the annual depreciation amount will be:
2: 6 × 45,000 rubles. = 15,000 rubles.
Amount of monthly deductions:
15 000 rub. : 12 months = 1250 rubles.
And in the third year of operation of the facility, the annual depreciation amount is equal to:
1: 6 × 45,000 rubles. = 7500 rubles.
Amount of monthly deductions:
7500 rub. : 12 months = 625 rubles.
The method of writing off the cost in proportion to the volume of products (works)
The write-off of the cost in proportion to the volume of products (works) most accurately reflects the physical depreciation of the fixed asset. This is the advantage of the method. The disadvantage is the high complexity of calculations, the need for production planning.
When writing off the cost of a fixed asset in proportion to the volume of products (works), the annual depreciation rate and the annual depreciation amount are not determined. The fact is that the amount of depreciation deductions depends on the volume of production. And it can change throughout the year. Accordingly, the amount of monthly depreciation is required to be determined monthly according to the formula (clause 19 PBU 6/01 “Accounting for fixed assets”):
Example of depreciation in proportion to the volume of products (works)
The organization has purchased a laptop that can be used to manufacture an estimated 500 items. The initial cost of the fixed asset, formed in accounting, is 45,000 rubles.
According to the accounting policy, in accounting, depreciation on laptops is charged in proportion to the volume of products produced.
In September 2015, 35 units were made using the laptop.
The amount of depreciation accrued on the laptop was in the specified month:
35 pcs. × 45,000 rubles. : 500 pcs. = 3150 rubles.
What is depreciation and why is it needed, we told in ours. In accounting and tax accounting, fixed assets (PP) and intangible assets (IA) are depreciated in cases provided for by law. In this case, only methods for calculating depreciation allowances provided for by accounting or tax legislation. We will recall the existing methods for calculating depreciation of fixed assets and intangible assets in our consultation.
Accounting depreciation methods
We give in the table the methods for calculating depreciation in accounting, which are used when calculating depreciation deductions for fixed assets and intangible assets:
Recall that in relation to all fixed assets included in one group of homogeneous objects, the same method of calculating depreciation should be applied (paragraph 18 of PBU 6/01). The group of homogeneous objects of fixed assets may include buildings, structures, measuring instruments, computer equipment, vehicles etc. Which objects form a group of homogeneous objects can be specified in.
According to intangible assets, only in relation to a positive business reputation, the depreciation method must always be applied the same - linear (clause 44 PBU 14/2007). For the remaining intangible assets, you can choose any method for calculating depreciation, and separately for each object.
Methods for calculating depreciation in tax accounting
In tax accounting, the calculation of depreciation deductions is made:
- linear;
- non-linear.
The same rules apply to the choice of the depreciation method in tax accounting for both fixed assets and intangible assets. So it is always necessary to apply the straight-line depreciation method in the following cases (clause 3 of article 259 of the Tax Code of the Russian Federation):
- all organizations to buildings, structures, transmission devices and intangible assets, the useful life of which exceeds 20 years;
- the following organizations that use fixed assets exclusively in the production of hydrocarbons at a new offshore field:
- organizations holding licenses for the use of a subsoil plot within which either a new offshore hydrocarbon deposit is located or it is planned to search, evaluate or explore such a deposit;
- operators of a new offshore hydrocarbon deposit.
For depreciation of other fixed assets and intangible assets, a linear or non-linear method can be chosen. At the same time, it should be applied immediately to all depreciable fixed assets and intangible assets.
You can read more about the non-linear depreciation method in tax accounting.
General provisions
In accounting, fixed assets accounted for on account 01 or 03 are depreciated. Assets reflected in inventories are not subject to depreciation (clauses 4, 5, 17 PBU 6/01 “Accounting for fixed assets”). Also, objects, which we additionally described in a separate article, are not subject to depreciation.
Through depreciation, the entire initial cost of property classified as depreciable is written off (clauses 8 and 17 of PBU 6/01 “Accounting for fixed assets”).
Over what period is depreciation charged?
Depreciation on fixed assets in accounting is charged from the 1st day of the month following the month in which the object was accepted for accounting (clause 21 PBU 6/01 "Accounting for fixed assets"). Attention: you do not need to wait for the start of the operation of the property.
Depreciation is accrued until the cost of the object is paid off in full or until the object is deregistered (clause 21 PBU 6/01 “Accounting for fixed assets”). Accordingly, the depreciation charge ends on the 1st day of the month following the month of the full repayment of the value of this object or its deregistration (clause 22 PBU 6/01 “Accounting for fixed assets”).
During the useful life of an object, depreciation is not suspended. An exception is cases of transferring a fixed asset to conservation for a period of more than three months, as well as a period of restoration of an object lasting more than 12 months (clause 23 PBU 6/01 "Accounting for fixed assets").
How depreciation of fixed assets is reflected in the accounting accounts
Accounting for accrued depreciation is carried out depending on the purpose for which the depreciable fixed asset is used. Postings can be as follows (Instructions for the Chart of Accounts):
Debit 20 (23, 25, 44...) Credit 02
Depreciation has been accrued on a fixed asset used in the production of goods (performance of work, provision of services) or in trading activities;
Debit 08 Credit 02
Depreciation was accrued on the fixed asset used in the creation (modernization, reconstruction) of a non-current asset;
Debit 91 sub-account "Other expenses" Credit 02
Depreciation has been accrued on fixed assets used in other activities.
See a handy spreadsheet here.
What are the depreciation methods
In accounting, depreciation of fixed assets can be calculated using one of four methods (clause 18 PBU 6/01 “Accounting for fixed assets”):
- linear way;
- reducing balance method;
- method of writing off the cost by the sum of the numbers of years of the useful life;
- method of writing off the cost in proportion to the volume of products (works).
Let's look at each method in detail below.
Secure the selected depreciation method in the accounting for accounting purposes. At the same time, keep in mind: in accounting it is permissible to apply different methods to different groups homogeneous fixed assets. However, it is impossible to change the method of calculating depreciation for a specific object after the property has been put into operation. That is, during the entire useful life of the object, one method must be applied (clause 18 PBU 6/01 “Accounting for fixed assets”).
Linear method in accounting
When depreciating in a linear way, the annual rate is first calculated using the formula:
Then - the annual depreciation amount according to the formula:
The amount of depreciation that must be charged monthly is equal to 1/12 of the annual amount (clause 19 PBU 6/01 “Accounting for fixed assets”).
Example of straight-line depreciation
The organization acquired a fixed asset - a laptop at a price of 45,000 rubles. (without VAT). In accordance with the Classification approved by Decree of the Government of the Russian Federation of 01.01.2002 No. 1, the laptop belongs to the second group (useful life from two to three years inclusive). The accountant determined the useful life of the laptop at 3 years (36 months). depreciation method, accounting policy companies in relation to fixed assets in accounting - linear.
The total annual depreciation rate is:
1: 3 years × 100% = 33.3334%.
Annual amount of depreciation deductions:
45 000 rub. × 33.3334% = 15,000 rubles.
Monthly depreciation amount:
Decreasing balance method
With the reducing balance method, the annual depreciation rate is first determined by the formula:
After that, the annual depreciation amount is calculated using the formula:
The monthly depreciation amount is equal to 1/12 of the annual amount (clause 19 PBU 6/01 "Accounting for fixed assets").
Please note: the residual value of the object is taken at the beginning of each year, so the annual depreciation amount will gradually decrease. Accordingly, the amount of monthly depreciation will decrease annually.
The company sets the increasing coefficient to the depreciation rate on its own, approving a specific value in the accounting policy. The maximum value of the coefficient is 3.0 (clause 19 PBU 6/01 "Accounting for fixed assets"). At the same time, the coefficient of 3.0 can only be applied for depreciation of fixed assets put into operation after December 31, 2005. For other fixed assets, multiplying factors must be applied that were originally set when they were put into operation (order 147n dated 12/12/2005, letter of the Russian Ministry of Finance dated 06/22/2007 No. 03-05-06-01 / 71).
Declining balance calculation example
The organization purchased a laptop. The initial cost of the fixed asset, formed in accounting, is 45,000 rubles. The facility was commissioned in December 2014. Useful life - 3 years.
According to the accounting policy, in accounting, depreciation on laptops is calculated using the reducing balance method using a multiplying factor of 1.5.
This laptop has been depreciated since 2015. The residual value at the beginning of 2015 is equal to its initial value, since depreciation was not charged in 2014.
The annual depreciation rate is:
1:3 x 100% = 33.3334%.
The calculation of depreciation for the useful life of a laptop is shown in the table:
Year of operation |
Residual value at the beginning of the year, rub. |
Depreciation rate, % |
The annual amount of depreciation deductions, taking into account the increasing coefficient, rub. (column 2 × column 3 × 1.5) |
Monthly amount of depreciation charges during the year, rub.
|
Residual value at the end of the year, rub.
|
|---|---|---|---|---|---|
According to the write-off of the residual value of the fixed asset, the accountant chose from two options:
Option 1. Write off the residual value of the object in accounts 02 in the last month of the useful life.
Option 2. Continue to depreciate the object using the reducing balance method until the moment it is written off due to disposal (sale, obsolescence or physical deterioration, etc.).
Given the materiality of the amount of the balance, the accountant chose option 2.
Write-off method based on the sum of numbers of years of useful life
When writing off the cost by the sum of the numbers of years of the useful life, the annual depreciation amount is immediately calculated using the formula:
The amount of depreciation that must be charged monthly is equal to 1/12 of the calculated annual amount (clause 19 PBU 6/01 “Accounting for fixed assets”).
An example of calculating depreciation by the sum of the numbers of years of useful life
The organization purchased a laptop. The initial cost of the fixed asset, formed in accounting, is 45,000 rubles. The estimated useful life of the facility is 3 years.
According to the accounting policy, in accounting, depreciation for laptops is calculated by writing off the cost by the sum of the numbers of years of the useful life.
The sum of the number of years of useful life of a laptop is equal to:
1 + 2 + 3 = 6 .
In the first year of operation of the facility, the annual depreciation amount will be:
3: 6 × 45,000 rubles. = 22 500 rubles.
The amount of monthly deductions is equal to:
22 500 rub. : 12 months = 1875 rubles.
In the second year of operation of the facility, the annual depreciation amount will be:
2: 6 × 45,000 rubles. = 15,000 rubles.
Amount of monthly deductions:
15 000 rub. : 12 months = 1250 rubles.
And in the third year of operation of the facility, the annual depreciation amount is equal to:
1: 6 × 45,000 rubles. = 7500 rubles.
Amount of monthly deductions:
7500 rub. : 12 months = 625 rubles.
The method of writing off the cost in proportion to the volume of products (works)
When writing off the cost of a fixed asset in proportion to the volume of production (work), the amount of monthly depreciation is determined monthly according to the formula (clause 19 PBU 6/01 “Accounting for fixed assets”):
Example of depreciation in proportion to the volume of products (works)
The organization has purchased a laptop that can be used to manufacture an estimated 500 items. The initial cost of the fixed asset, formed in accounting, is 45,000 rubles.
According to the accounting policy, in accounting, depreciation on laptops is charged in proportion to the volume of products produced.
In September 2015, 35 units were made using the laptop.
The amount of depreciation accrued on the laptop was in the specified month:
35 pcs. × 45,000 rubles. : 500 pcs. = 3150 rubles.
Let's take a look at the concept of depreciation. Here you will learn how to calculate the depreciation of fixed assets. Starting from 2002 and up to the present day, there are the following depreciation methods in accounting: straight-line depreciation method, diminishing balance method, method in proportion to the volume of output, as well as the method by the sum of numbers of years of useful life. In the article, we will analyze these 4 methods for calculating depreciation with examples.
The calculation of depreciation deductions for fixed assets involves the use of the initial or residual value and the depreciation rate of fixed assets. The initial cost is the cost at which the object is accepted for accounting upon receipt by the enterprise. Read more about the receipt of fixed assets. The residual value of fixed assets is the difference between the original cost and accrued depreciation.
The general formula for calculating depreciation:
Cost (initial or residual) * depreciation rate / 100%.
Calculating the rate is very simple, for this you need to divide the entire depreciation (taken as 100%) by. Then you can calculate the amount of depreciation for the past year, that is, multiply the initial cost by the rate and divide by 100%. How to calculate depreciation per month? To do this, it remains only to divide the amount received by the previous action by the number of months in a year.
Linear calculation example:
The fixed asset has an initial cost of 500,000. The useful life is 10 years. Calculate monthly depreciation:
Norma A. \u003d 100% / 10 years \u003d 10%
Annual A. \u003d 500,000 * 10% / 100% \u003d 50,000.
Monthly A. = 50,000 / 12 months. = 4167.
Learn more about applying the linear method .
2. Declining balance method
Its difference from the linear method is that the basis for accrual is not the initial cost, but the residual. Residual value is the original cost minus depreciation (accumulated depreciation). In addition, this method uses an acceleration factor by which the depreciation rate is multiplied. This method is also called accelerated.
Calculation example:
There is a fixed asset with an initial cost of 100,000. The useful life is assumed to be 4 years.
Norm A. \u003d 4 / (4 + 3 + 2 + 1) * 100% \u003d 40%
Annual A. \u003d 100,000 * 40% / 100% \u003d 40,000.
Monthly A. = 40000 / 12 = 3333.
Norm A. \u003d 3 / (4 + 3 + 2 + 1) * 100% \u003d 30%
Annual A. \u003d 100,000 * 30% / 100% \u003d 30,000.
Monthly A. = 30000 / 12 = 2500.
Depreciation charges for other years are calculated in a similar way.
4. Write-off method proportionally
The cost of fixed assets is written off in proportion to the volume of products produced or services rendered. The method is used only for those OS objects, the documentation of which indicates the expected volume of output. IN this case the depreciation rate is determined by dividing the initial cost of the object by the volume of work planned by the manufacturer, and the amount of depreciation deductions is determined by multiplying the depreciation rate by the actual volume of output for the reporting period.
