About the difference between impairment provision and accumulated depreciation of fixed assets

The Accounting System for Business Enterprises is still in use, and the Accounting Standards for Business Enterprises and the Accounting Standards for Small Enterprises are currently in use.

Depreciation is no longer required for fixed assets for which provision for impairment has been fully accrued. It can be seen that the scope of fixed assets for depreciation is much larger than the scope of fixed assets for impairment provision".

The teacher always marks these words in red, mainly to pay attention to understanding the relationship between the two.

Impairment and depreciation of fixed assets are an important part of fixed asset accounting, and from the content of the balance sheet, "depreciation" and "impairment provision" are both provision items of "fixed assets", which complement each other and jointly reflect the reduction of the book value of fixed assets. Whether it is the provision for impairment or the withdrawal of depreciation, it reflects the "prudent" principle of "correctly calculating losses and overpayments, reducing risk losses, and reasonably determining the cost compensation scale" to varying degrees. It is precisely because the impairment and depreciation of fixed assets have many things in common that the difference between the two is understood in practice.

In my personal understanding, in the case of residual value, after the full impairment of fixed assets is provided, it means that it cannot bring cash flow to the enterprise in the future, that is, the future cash flow is 0, but if the disposal generates a gain equivalent to the residual value (assuming that there is no disposal profit or loss), then the enterprise will choose to dispose of the fixed assets. That is, it enters the holding for sale stage. Then the fixed assets are not depreciated when they are held for sale.

Therefore, 5) other fixed assets that can no longer bring economic benefits to the enterprise. There is no problem with the fact that depreciation is no longer required for fixed assets for which provision for impairment has been fully accrued.

If an impairment provision has been made for a fixed asset, the depreciation rate and depreciation amount should be recalculated according to the carrying amount of the fixed asset (the original price of the fixed asset minus the accumulated depreciation and the provision for impairment) and the remaining useful life; If the value of a fixed asset for which an impairment provision has been made is restored, the depreciation rate and amount shall be recalculated according to the carrying amount and remaining useful life of the fixed asset after recovery. However, when the depreciation amount of fixed assets is adjusted due to the provision for impairment of fixed assets, no adjustment will be made to the accumulated depreciation that has been accrued before.

Pay attention to the global online school and ask whether the impairment provision of fixed assets affects depreciation.

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Provision for impairment of fixed assets.

It affects depreciation; If a fixed asset has been provided for impairment, the carrying amount of the fixed asset should be followed.

The original value of the fixed asset minus the accumulated depreciation.

and the provision for impairment) and the remaining useful life recalculation to determine the depreciation rate and depreciation amount.

In the process of production and operation, the enterprise uses fixed assets and causes the loss of their value to reduce 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. [1] A monetary estimate of the value of the value consumed by capital 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.

Accumulated depreciation. Nayuancha is a fixed asset.

The part of the price value consumed in the process of use, the split version is a component of the cost;

An asset impairment provision is an estimated loss of value of an asset during the holding process, and this loss has not really been realized and may not be realized.

Accumulated depreciation is.

of fixed assets.

Everyday use.

Normal wear and tear. Crude impairment provision for fixed assets.

Be. Now fixed fixed spine stool pants.

Price. Buy fixed assets now than before.

Cheap Sakura Jane.

The difference is credited. Provision for impairment of fixed assets.

1. The nature and purpose of the two are different.

Accumulated depreciation. It is the "measurement of asset value loss", which apportions the value of fixed assets to the expected useful period of fixed assets according to a certain standard, so as to achieve the ratio of income and expenses, which is a means of cost allocation or apportionment process.

The impairment of the value of fixed assets represented by depreciation is mainly due to the value transfer formed by the participation of fixed assets in production and business activities, which can be compensated from the sale of goods.

and provision for impairment of fixed assets.

In essence, from the perspective of "the asset is the expected future economic benefit", the recoverable amount and the book value.

Make regular comparisons. When the recoverable amount is lower than the book value, the impairment of the fixed assets is recognized, and the impairment provision for the fixed assets is made to adjust the book value of the fixed assets, so that the book value of the book price can truly and objectively reflect the actual value.

2. The accounting time of the two is different.

The provision for depreciation of fixed assets is made on a monthly basis and is included in the relevant costs or current expenses according to the purpose, which is due to the passage of normal time in different accounting periods.

costs or expenses, which are systematic and related;

However, the accounting of impairment provision for fixed assets is usually carried out at the end of the year or at the end of the specified accounting period according to the actual situation, and in the absence of evidence that the impairment has occurred, there is no need to make accounting treatment, so there is no inevitable systematic connection between the impairment loss in different accounting periods and the passage of time or normal use.

3. The accrual method of the two is different.

Enterprises choose the depreciation method according to the expected realization of the economic benefits contained in the fixed assets, which can use the average life method, the workload method, the sum of years method, and the double declining balance method.

Wait. If there is a significant change in the expected way in which the economic benefits contained in the fixed assets are realized, the depreciation method of the fixed assets can be changed accordingly.

However, there are no multiple alternative methods for the provision for impairment of fixed assets like depreciation, and it is mainly made at the end of the period through the valuation, analysis and comparison of the recoverable amount of fixed assets and their book value.

Depreciation of fixed assets purchased by an enterprise is generally accrued on a monthly basis, and when the recoverable amount of fixed assets is lower than the book value due to damage, provision for impairment should be made. So how to distinguish between impairment provision and accumulated depreciation of fixed assets?

The frequency and regularity of their occurrence are different. Depreciation is generally accrued on a monthly basis, so depreciation accrual is frequent, and the amount accrued is regular, and it matches the current income. The impairment of fixed assets is different, it is a non-operating expense, and the reasons for the impairment of fixed assets do not occur frequently.

The two are aimed at different objects. Accumulated depreciation is a reduction of the original value of a fixed asset, while an impairment provision for a fixed asset is a reduction of the net value of a fixed asset. This is evident from the presentation of the financial statements.

The timeliness with which the two deal with the problem differs. The estimated service life of fixed assets, the estimated net residual value, and the depreciation method shall not be changed at will once determined. When there is a deviation in the depreciation estimate and the value of the fixed asset is impaired, the provision for impairment of the fixed asset can be adjusted in a timely manner at the end of the period.

How to understand the provision for impairment of fixed assets?

The recoverable amount of a fixed asset is lower than its book value due to damage, technical obsolescence or other economic reasons, which is called impairment of fixed asset assets.

If the recoverable amount of a fixed asset is lower than its book value, an impairment provision shall be made for the difference between the recoverable amount and its book value, and shall be included in the profit or loss for the current period.

What is Accumulated Depreciation of Fixed Assets?

During the useful life of the fixed assets, the enterprise shall systematically allocate the accrued depreciation amount in accordance with the determined method, and reasonably determine the useful life and estimated net residual value of the fixed assets according to the nature and use of the fixed assets. Once the useful life and estimated net residual value of fixed assets are determined, they shall not be changed at will. Accumulated depreciation refers to the accumulated depreciation of fixed assets withdrawn by an enterprise at the end of the reporting period.

This indicator is presented at the end of the period under the "Accumulated Depreciation" item in the accounting "Balance Sheet". Accumulated depreciation is when the credit registers an increase, the debit registers a decrease, and the balance is on the credit.

Depreciation of fixed assets shall be accrued on a monthly basis, and the depreciation accrued shall be recorded in the "accumulated depreciation" account, and included in the cost of the relevant assets or current profit or loss according to the use.

The depreciation of fixed assets used in the process of self-construction of fixed assets by enterprises shall be included in the cost of construction in progress; The depreciation of the fixed assets used in the basic production workshop shall be included in the manufacturing expenses; The depreciation of fixed assets used by the management department shall be included in the management expenses; The depreciation of the fixed assets used by the sales department shall be included in the sales expenses; The depreciation amount of the fixed assets leased out of operation shall be included in other business costs.