How to calculate the accumulated depreciation of fixed assets and how to make entries

Borrow: Administrative Expenses - Operating Expenses - Costs.

Credit: Depreciation. If it is a fixed asset from a financial lease, the entries are the same as above.

In the case of an operating lease, the renovation cost is included in the amortized time expectant expense.

The leased fixed assets should be placed in the expense to be amortized.

Borrow: Administrative Expenses - Operating Expenses - Costs.

Credit: Long-term amortized expenses.

Single-period depreciation = (original value - residual value) Depreciation period.

Borrow: manufacturing costs.

Credit: Accumulated depreciation.

1·“ The accounting account of "accumulated depreciation" is special and belongs to the asset account, but it is different from the increase in debit registration and the decrease in credit registration in general asset accounts, which is an increase in credit registration and a decrease in debit registration, which we can understand as a special asset, referred to as "special product". Similar accounts include accumulated amortization, bad debt provisions, asset impairment provisions, etc.

2. According to the use, the cost or current profit or loss of the relevant assets shall be debited and the accounts of "manufacturing expenses", "sales expenses", "management expenses", "other business costs", "R&D expenditures" and "construction in progress" shall be credited, and the "accumulated depreciation" account shall be credited.

3. When accruing depreciation, it should be noted that the increase of fixed assets in the current month is not mentioned in the next month; The current month will be reduced, the current month will be suspended, and the next month will be suspended. After the depreciation of fixed assets is sufficient, no depreciation will be provided regardless of whether they can continue to be used; Depreciation will not be made for fixed assets that are scrapped in advance.

4. The enterprise shall provide depreciation for all fixed assets, except for the fixed assets that have been fully depreciated and continue to be used and the land that is separately valued and recorded.

For example, if an enterprise wants to sell a fixed asset, the original value of the asset is 10 million, the accumulated depreciation is 4 million, and it is sold for 6 million. At this time, the book value must be transferred to the fixed asset disposal account

Debit: 600 fixed assets disposal

Accumulated depreciation 400

Credit: fixed assets 1000

Debit: Bank deposit 600

Credit: 600 fixed assets disposal

1. Straight-line annual depreciation rate = (1-5%) 5=

Accrued depreciation for each year = 50,000*

Accounting entries for the depreciation amount of the first year, debit: manufacturing expenses 9500, credit: accumulated depreciation 95002, double declining balance method annual depreciation rate = 2 5=

Depreciation in the first year = 50,000*

Depreciation in the second year = (50,000-20,000) * depreciation in the third year = (50,000-20,000-12,000) * depreciation in the fourth year = (50,000-20,000-12,000-7,200-2,500) 2 = 4,150

Depreciation in the fifth year = (50000-20000-12000-7200-2500) 2=4150

Accounting entries for the depreciation amount of the first year, debit: manufacturing expenses 20,000, credit: accumulated depreciation 20,000

1. Depreciation shall be accrued according to the use or benefit part:

Borrow: Management Fees

Make costs, talk about disguise.

Selling expenses, credit: accumulated depreciation;

2. When the scrapped and damaged fixed assets are transferred to liquidation, they shall be borrowed: fixed assets disposal (book value of fixed assets), accumulated depreciation (depreciation that has been accrued), provision for impairment of fixed assets (provision for impairment deficiency that has been accrued), credit: fixed assets (original book value of fixed assets).

Methods of depreciation of fixed assets: average method, workload method, double declining balance method and sum of years method, etc. In addition, the enterprise shall reasonably choose the corresponding depreciation method of fixed assets within the scope of the foregoing according to the expected realization of the economic benefits related to fixed assets.

Regulations on the Implementation of Enterprise Income Tax

Article 59.

Depreciation of fixed assets calculated according to the straight-line method is allowed to be deducted. The enterprise shall calculate the depreciation from the month following the month in which the fixed assets are put into use;

Depreciation of fixed assets that are no longer in use shall cease to be calculated from the month following the month in which they are discontinued. Enterprises should reasonably determine the estimated net residual value of fixed assets according to their properties and usage. Once the estimated net residual value of a fixed asset has been determined, it cannot be changed.

Regulations on the Implementation of Enterprise Income Tax

Article 60. Unless otherwise stipulated by the competent financial and tax authorities, the minimum period for calculating depreciation of fixed assets is as follows:

1) 20 years for houses and buildings;

2) Aircraft, trains, ships, machines, machinery and other production equipment are cleared for 10 years;

3) 5 years for appliances, tools, furniture, etc. related to production and business activities;

4) 4 years for means of transport other than airplanes, trains, and ships;

e) electronic equipment, for 3 years.

The method of accrued depreciation entries is: accrual of depreciation: debit: management expenses; manufacturing expenses, sales expenses; Credit: Accumulated depreciation.

Accumulated depreciation generally refers to the depreciation of fixed assets caused by the use of fixed assets in the process of production and operation, resulting in the loss of value and only a certain residual value, and the difference between the original value and the residual value is apportioned over its useful life, which is the depreciation of fixed assets. Determining the depreciation range of a fixed asset is a prerequisite for accruing depreciation.

A monetary estimate of the value of the capital expended during the period examined. Also known as capital consumption allowance in the national income account. Depreciation of fixed assets refers to the systematic apportionment of the accrued depreciation amount according to the determined method during the useful life of the fixed assets.

Useful life refers to the expected life of a fixed asset, or the quantity of goods or services that the fixed asset can produce. Accrued depreciation refers to the amount of the original price of a fixed asset for which depreciation is accrued after deducting its estimated net residual value. For fixed assets for which provision for impairment has been made, the cumulative amount of provision for impairment of fixed assets shall also be deducted.

Fixed assets and intangible assets, which are used to produce products, also have costs. Its value, which is its cost, needs to be included in the cost of the product. Amortization is required. This is the reason why depreciation should be made for fixed assets.

Methods analysis

Depreciation is only a cost analysis, depreciation is not the valuation of assets, and it is neither a capital nor a use of funds, therefore, the depreciation of fixed assets does not undertake the renewal of fixed assets. However, since the depreciation method affects the income tax of the enterprise, it will also have an impact on the cash flow.

Depreciable fixed assets are not all fixed assets are depreciated, and the conditions for depreciable fixed assets are: the service life is limited and can be reasonably estimated, that is, the fixed assets will be gradually worn out in the process of use until they have no use value.

How to calculate accumulated depreciation.

1) Average life method: The average life method, also known as the "straight-line method", is based on the life of fixed assets and depreciates them on average. The depreciation withdrawn is calculated in this way, and the resulting depreciation is the same in each year or month, and the amount of accumulated depreciation increases linearly.

The calculation formula is: annual depreciation = (original value - estimated net residual value) life expectancy = (1 - estimated net residual value original price) life expectancy"Estimated net residual value"It refers to the expected income after the retirement of fixed assets.

2) Calculation according to workload: The workload method is based on the actual workload of fixed assets and depreciates them. The workload method is a linear method.

Its basic formula is: Depreciation amount per unit of work = (1 - net residual value rate) Original value of fixed assets Estimated total work. The monthly depreciation amount of a fixed asset = the monthly workload of the fixed asset * the depreciation rate of the unit.

3) Two declining balances: The double declining balance method is a method of secondary depreciation of fixed assets. This is a method that excludes the net value of fixed assets and depreciates fixed assets based on the book balance of the fixed assets at the beginning of each period and the depreciation rate of the two straight-line methods.

It is calculated as follows: Annual depreciation rate = (2 estimated life) * 100%. By annual depreciation rate of 12, the monthly depreciation amount = the book value of the fixed asset The monthly depreciation rate.

Since the two declining balance methods do not include residual income from fixed assets, it should be noted that their carrying amount cannot be reduced below their estimated residual income when using this method. According to the existing system, fixed assets are depreciated by the method of secondary declining balances, and the depreciation period is amortized on an average basis according to the net value of fixed assets two years before the expiration of the depreciation period.

4) Annual total: The annual accumulation method, also known as the total life method, refers to the calculation of the annual depreciation amount by multiplying the net amount of the original positive limb value of the fixed assets minus the net residual value by the decreasing score by year. The numerator of this score represents the useful life of the fixed asset, and the denominator represents the total number of useful years in each year.

The formula is as follows: annual depreciation rate = sum of available years of life expectancy, at the annual depreciation rate of 12, monthly depreciation amount = (value of fixed assets - estimated residual value) * monthly depreciation rate.