Why are long term amortized expenses an asset account?

The reason why long-term amortized expenses belong to the asset class is that it is used to account for various expenses that have been paid by the enterprise and should be borne by the current period and subsequent periods with an amortization period of more than one year (excluding one year), including expenses for major repairs of fixed assets and improvement expenses for leased fixed assets. Loan interest and rent, etc., which should be borne by the current period, shall not be treated as long-term amortized expenses. It can be assumed that money is deposited here now and used to pay for expenses later, so it is an asset.

This is because long-term amortized expenses account for the amortized expenses that have already been incurred by the enterprise but should be borne by the current and subsequent periods. According to the principle of accrual accounting, although the company has spent this money, but the benefit period is relatively long, which is done for the company's long-term continuous operation, if all of it is included in the current profit and loss is obviously inappropriate, in fact, it should be apportioned in the following period, so it belongs to the asset class account.

Extended information: The long-term amortized expense account accounts for the apportionment period that has been incurred by the enterprise but should be borne by the current and subsequent periods is 1

Expenses above the annual level, such as the improvement expenses incurred in the form of operating leases for fixed assets. The long-term amortized expenses incurred by the enterprise shall be debited to this account and credited to the relevant account"Bank deposits"、"Raw materials"and other subjects. Amortization of long-term amortized expenses, debited"Management fees"、"Selling expenses"and other accounts, credit this account.

For example, an enterprise carries out major repairs to its leased power generation equipment, and a total of major repair expenses are incurred after accounting24

000 yuan, and the repair interval is 4 years. The entries are as follows:

Borrow: Long-term amortized expenses Major repair expenses 24

Credit: Bank deposits.

The above-mentioned major repair costs are amortized on an average basis over a period of 4 years, with an amortization of 500 yuan per month. The entries are as follows:

Borrow: 500 for administrative expenses

Credit: Long-term amortized expenses Major repair expenses 500

Long-term amortized expenses refer to the expenses that have been incurred by the enterprise but have an amortization period of more than one year (excluding one year). Although it is the enterprise that has already spent, from the definition, the first is that the enterprise has paid for the subsequent benefit periods, and the benefit period is longer, at least more than one year. If all this expenditure is used as a payment period expense, it violates the principle of "whoever benefits, who bears the burden", resulting in an unreasonable burden.

Therefore, such expenses should be treated as amortized expenses, and because the period is more than one year, they are called long-term amortized expenses, and they are amortized equally according to other standards during each benefit period. So it's a kind of savings, of course, for assets.

Extended information: "Long-term amortized expenses" account is used to account for various expenses that have been incurred by the enterprise but have an amortization period of more than one year (excluding one year), including expenses for repairing fixed assets, expenses for improving leased fixed assets, and other expenses to be amortized with an amortization period of more than one year.

Under the "long-term amortized expenses" account, the enterprise should set up a detailed account according to the type of expense, conduct detailed accounting, and disclose its amortized value, amortization period, amortization method, etc. according to the expense items in the notes to the accounting statements.

Long-term amortized expenses.

It belongs to the asset class because it is used to account for the expenses that have been paid by the enterprise and should be borne by the current period and subsequent periods with an amortization period of more than 1 year (excluding 1 year). This type of expense is called a long-term amortized expense because it has an amortization period of more than one year, and it is amortized equally at other standards during each benefit period. So it's a kind of savings, of course, for assets.

Hello, the difference between long-term amortization of Liangyan expenses and fixed assets: 1. Different meanings: 1. Long-term amortization expenses refer to the expenses that have been spent by the enterprise but have an amortization period of more than 1 year (excluding 1 year), including the improvement expenses of leased fixed assets and the overhaul expenses of fixed assets with an amortization period of more than 1 year, and the issuance costs.

2. Fixed assets refer to non-monetary assets held by enterprises for the production of products, provision of labor services, leasing or operation and management, which have been used for more than 12 months and have reached a certain standard in value, including houses, buildings, machines, machinery, means of transportation and other equipment, appliances and tools related to production and business activities. 2. Different functions: 1. Fixed assets, the labor means of the enterprise, are also the main assets on which the enterprise relies for production and operation.

From the perspective of accounting, fixed assets are generally divided into production fixed assets, non-production fixed assets, rough fixed assets, unused fixed assets, unused fixed assets, financial lease fixed assets, and donated fixed assets. 2. Expenses to be amortized, which have been incurred but should be borne by the current period and subsequent periods, are no longer used in the new accounting standards.

Long-term amortized expenses are the expenses that have been incurred by the enterprise but have an amortization period of more than 1 year (including 1 year), including the repair expenses of reconstructed fixed assets, the improvement expenses of leased fixed assets, and other expenses to be amortized with an amortization period of more than 1 year.

From the above, it can be seen that long-term amortized expenses are incurred at one time, but they need to be amortized to the current profit or loss on a period-by-period basis; When it has not yet been recognized as an expense, it is equivalent to the money paid by the enterprise in advance for shipment, so it belongs to the asset account.

For the repair expenditure of fixed assets and the improvement expenditure of leased fixed assets, accountants generally account for them through the account of "long-term amortized expenses". Is long-term amortized expense an asset account? This article will answer this question in detail.

Long-term amortized expenses are asset class accounts.

Long-term amortized expenses refer to the expenses that have been incurred by the enterprise but have an amortization period of more than one year (excluding one year). Although this expense has been incurred, the substance is more important than the form, and it actually belongs to the payment made by the enterprise for the subsequent benefit period. Therefore, in a sense, the amortization of long-term amortized expenses in the subsequent benefit period is a kind of savings belonging to the enterprise and should belong to the assets of the enterprise.

Accounting entries for long-term amortized expenses.

1. When the enterprise incurs long-term amortized expenses, the following accounting entries are made:

Borrow: Long-term amortized expenses.

Credit: bank deposits, etc.

2. When the enterprise amortizes the long-term amortized expenses, make the following accounting entries:

Borrow: manufacturing expenses, selling expenses, administrative expenses.

Credit: Long-term amortized expenses.

How are long-term amortized expenses amortized?

1. The reconstruction expenses of fixed assets that have been fully depreciated shall be amortized in installments according to the estimated service life of the fixed assets. Generally, in the case of renovation and expansion, the service life of the asset can be extended. According to the relevant provisions of the Small Business Guidelines, since the depreciation period cannot be adjusted, the "fixed assets that have been fully discounted and used off" can only be accounted for through "long-term amortized expenses", and the fixed assets can be amortized in installments within the expected useful life.

2. The reconstruction expenses of fixed assets leased from operating lease shall be amortized in installments according to the remaining lease term agreed in the contract. The lessee only has the right to use the asset within the term specified in the agreement, so the reconstruction expenses incurred in the fixed assets leased in the form of operating lease can only be included in the accounting of long-term amortized expenses and amortized equally during the lease period agreed in the agreement.