What is depreciation and what does depreciation mean?

The depreciation of fixed assets is the loss of value of fixed assets due to wear and tear, natural erosion, scientific and technological progress and improvement of labor productivity. According to the factors affecting the loss of fixed assets, it can be divided into tangible loss and intangible loss. The former is mainly caused by wear and tear, natural erosion and external force damage; The latter is caused by the fact that under the same conditions, technological progress and labor productivity increase, and the cost of producing the same equipment is lower.

Depreciation method. The formula for calculating depreciation.

Average years method.

Depreciation amount of fixed assets = (original value of fixed assets - net residual value) Depreciation period of fixed assets.

Monthly depreciation rate = depreciation of fixed assets Original value of fixed assets 12 Monthly depreciation of fixed assets = Monthly depreciation of fixed assets Original value of fixed assets.

Workload method. Depreciation per kilometer (per working hour per shift) = (original value of fixed assets - estimated net residual value) exercisable kilometers (working hours per shift).

Monthly depreciation = depreciation per kilometer (per working hour per shift) Actual kilometers traveled per month (actual working hours per month can be workbench shifts).

Double declining balance method.

Annual depreciation rate = 2 depreciation years.

Monthly depreciation rate = annual depreciation rate of 12

Monthly depreciation amount = book value of fixed assets at the beginning of the month Monthly depreciation rate.

Sum of years method.

Annual depreciation rate = the number of years that can be used in the year The sum of the number of years that can be depreciated.

Annual depreciation amount = (original value of fixed assets - estimated net residual value) annual depreciation rate.

Monthly depreciation = annual depreciation 12

Depreciation: installment depreciation and one-time depreciation. There is no formula, it depends on the specific situation of the actual product.

Depreciation in stages: If there is no fixed property, it can be depreciated in annual increments according to the service life, and when depreciating, the depreciation number can be increased year by year until the life span, and if it can also be used, the real estate can be revalued and depreciated. And so on.

One-time depreciation: that is, decoration and the like, as long as it is invested, it can be depreciated at one time.

Depreciation is to amortize the loss value of fixed assets into daily expenses To put it bluntly, that is, you buy back a machine, and scrap it after 5 years, during which you can't watch it wear out until it is scrapped, so if you want it to generate value, you must let the value of its loss participate in the production and operation of the enterprise, and include it in the cost of the enterprise, so as not to let the fixed assets be lost in vain

Extended information: 1. Depreciation is a ratio of the service life of an item to the value of the item. When the factory needs a lot of money to build and use items such as some relatively large and high-value equipment or plant buildings, the cost (the money spent on learning things) cannot be calculated at one time, but the length of its use (or other calculation methods) is apportioned on an annual basis, which is annual depreciation; And dividing the annual depreciation by 12 is the monthly depreciation.

For example, when a machine is bought, it costs 1100 yuan. It is estimated (that is, estimated) that it can be used for 10 years, and it will be scrapped after 10 years, and the scrapped waste can be sold for 100 yuan, if the average life method in the accounting is used to depreciate, it is to use (1100-100) 10=100, that is, the annual depreciation is 100 yuan.

Divide by 12 on a monthly basis. Of course, there are other methods of extraction in accounting. For example:

Workload method, double declining balance method, etc.

2. The depreciation of fixed assets refers to the part of the value of fixed assets that is gradually lost in the process of use and transferred to commodities or expenses, and is also the cost of fixed assets apportioned by enterprises during their service life due to the use of fixed assets in the process of production and operation. Determining the depreciation range of a fixed asset is a prerequisite for accruing depreciation.

3. Fixed assets for depreciation.

1) Housing buildings;

2) Machinery and equipment, food instruments, transport vehicles, tools and appliances in use;

3) Seasonal out-of-service and repair out-of-service equipment;

4) Fixed assets leased out in the form of operating leases and fixed assets leased in the form of financial leases.

Fixed assets for which depreciation is not accrued.

1) Fixed assets that have been fully depreciated and continue to be used;

2) land that has been valued separately in previous years;

3) Fixed assets that are scrapped in advance;

4) Fixed assets leased in the form of operating leases and fixed assets leased in the form of financial leases.

Summary. Depreciation refers to the value compensation of the loss of fixed assets during use. Generally, the calculation is based on the original value and expected useful life of the fixed asset.

Depreciation refers to the value compensation of fixed assets for the loss of jujube cherry blossoms in the process of Zhengwang's use. Generally, the calculation is based on the original value and expected useful life of the fixed asset.

Economic terms. Refers to the value of compensating for the loss of fixed assets. is a way to draw reserves for its renewal.

Photo mask slam off example sentence 1Depreciation is a reasonable and beneficial valuation method for both buyers and sellers. 2.

Depreciation is a measure to strengthen economic accounting, improve material management, and improve the efficiency of asset use. 3.The depreciation rate of different fixed assets is not the same.

In the process of production and operation, the enterprise uses fixed judgment assets to reduce the value and only excavate a certain residual value of the asset, 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. The depreciation of fixed assets refers to the systematic apportionment of the accrued depreciation amount of fixed assets in accordance with the determined method during the service life of 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 value 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.

Depreciation refers to the process of systematically and rationally allocating the cost of fixed assets during the effective use period of fixed assets.

Depreciation generally refers to the depreciation of fixed assets, and the depreciation of fixed assets refers to the systematic apportionment of the accrued depreciation amount according to the determined method during the service life of the fixed assets. Depreciation is also a way to compensate for the part of the value of fixed assets that is gradually transferred to new products due to wear and tear in the process of use.

The Concept of Depreciation of Fixed Assets Before the First Industrial Revolution (Industrial Revolution), there was almost no concept of depreciation in accounting, but since then, due to the development of large machines and industries, especially the development of railways and joint-stock companies, the concept of long-term assets has been born, and it has been required to distinguish between capital and earnings, so it has been established that depreciation expense is an unavoidable expense in the production process of enterprises.

The emergence of the concept of depreciation is an important symbol of the transformation of enterprises from the cash system to the accrual system, and its conceptual basis is the accrual system and the matching principle that reflects the requirements of this system. According to the principle of proportioning the shackle and the shackle, the cost of fixed assets is not only the cost incurred to obtain the current income, but also the cost incurred to obtain the subsequent income, that is, the cost of fixed assets is the cost incurred to obtain income during the effective use period of the fixed assets, which is naturally proportional to the income.

Fixed asset depreciation method

1. Average life method.

For fixed assets depreciated by the average life method, it is generally considered that the loss of fixed assets in each period is relatively average, and the proportion of income obtained in each period is similar. Under the average life method, the amount of depreciation is represented in a planar Cartesian coordinate system as a ray parallel to the x-axis (starting point on the y-axis), so depreciation is a fixed cost at this point.

2. Workload method.

Fixed assets depreciated by the workload method are generally considered to have relatively average wear and tear during work, but they basically cannot provide economic benefits outside of work. In essence, the workload method is a supplement and extension of the average years method. Under the average life method, the amount of depreciation is depreciated in a planar Cartesian coordinate system as a ray segment parallel to the x-axis (the first segment starts on the y-axis or the first quadrant), so depreciation is a fixed cost at this time.

3. Double declining balance method.

Fixed assets depreciated by the double declining balance method are generally considered to be in excess of wear and tear all year round, and the income obtained in each period is also declining. Under the double declining balance method, the depreciation amount is represented as a polyline in the planar Cartesian coordinate system, with a straight fluttering line with a negative slope in the early period, and a line segment parallel to the x-axis in the last two periods. Depreciation is therefore a variable cost in the first two periods and becomes a fixed cost in the last two periods.

4. Sum of years method.

Fixed assets depreciated by the sum of years method are generally considered to be in a state of strong vibration and high corrosion all year round, or the technological progress and product replacement of the industry in which they are located are relatively fast. Under the double declining balance method, the depreciation amount appears as a straight line with a negative slope in a planar Cartesian coordinate system. Therefore, the amount of depreciation is a variable cost.