Fixed assets, houses, machinery and equipment, etc., why mention depreciation, is it okay not to men

Fixed assets, houses, machinery and equipment, etc., why mention depreciation, is it okay not to mention depreciation?

Depreciation is because the fixed assets generally have a large amount and a long service life, and if they are included in the profit and loss of the first period at one time, the current profit of the enterprise will be greatly reduced, the burden will be heavier, and it does not conform to the principle of accrual accounting, so it will generally be evenly allocated to the actual use period to calculate the cost of each period.

In addition to the factors of financial statements, most enterprises like to mention depreciation at the initial stage. There are several reasons for this:

1.Money has a time value, simply put, a thousand dollars now is worth more than a thousand dollars a year later, because even if you deposit a thousand dollars in the bank now, you can definitely receive more than a thousand yuan in a year. Depending on the time value of the money, companies always want to receive cash earlier and pay cash later.

2.Different depreciation calculation methods will have an impact on the current profit of the enterprise, which will affect the income tax payable in the current period. For example, if an enterprise purchases a fixed asset worth 1 million, and the enterprise makes a profit of 1 million yuan in addition to the depreciation of fixed assets in the current period, it will make a profit of 900,000 yuan in the following year.

Method 1: If the enterprise records depreciation of 100,000 yuan in the current period, then the tax payable in the current period is (100-10)*10,000, and the depreciation in the latter period is fully accrued, then there is no need to pay a penny of income tax.

Method 2: If the enterprise mentions 1 million depreciation in the current period, then the enterprise will not pay a penny of income tax. Of course, in the following year, due to the depreciation of all fixed assets, the enterprise will pay income tax of 900,000 yuan.

In terms of the total amount, the income tax paid by the enterprise is the same, but by using method 2, the income tax can be paid late, which is equivalent to obtaining a one-year loan of 10,000 yuan interest-free.

Therefore, the tax law has strict provisions on the method of accruing fixed assets of enterprises, which is a time limit, and it is generally not allowed to be changed.

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.

However, according to the accrual principle, the period of his cost amortization should not be just one year, but the period of his use. Therefore, it is necessary to reasonably estimate the cost to be amortized for each period, which is the amount of depreciation and amortization per year. If it is directly amortized in full at the time of purchase, the expenses are high in the current year and the profit is reduced, while the profit in the following years is overvalued.

This is not allowed by accounting.

One of the main characteristics of fixed assets is that they can play a role in several production cycles and maintain their original physical form, and their value is gradually transferred to the products produced with the wear and tear of the fixed assets, and the value of the fixed assets transferred to the products is the depreciation of fixed assets.

The reason for the depreciation of fixed assets is that the cost of fixed assets is included in expenses. Because fixed assets are placed in asset management when they are purchased, only depreciation can be carried out to account for the purchase cost into the cost of the enterprise.

The purpose of depreciation is to match income and expenses to reflect substance.

If the fixed asset is used to produce the product, it means that the value is transferred to the product through the wear and tear of the fixed asset.

The Notice of the Ministry of Finance on Printing and Distributing the Accounting System for Business Enterprises (Cai Hui [2000] No. 25) is required

Article 35 The following fixed assets shall not be depreciated:

1) Unused and unused fixed assets other than houses and buildings;

2) Fixed assets leased in the form of operating leases;

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

4) The land recorded as a fixed asset shall be separately valued in accordance with the regulations.

Accounting Standards for Business Enterprises - Fixed Assets (Cai Kuai [2001] No. 57) Except for the following circumstances, enterprises should provide depreciation for all fixed assets:

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

2) Land recorded as fixed assets shall be separately valued in accordance with the regulations.

Accounting Standards for Business Enterprises No. 4 - Fixed Assets (2006) Article 14 An enterprise shall provide depreciation for all fixed assets. However, this excludes fixed assets that have been fully depreciated and continue to be used and land that is separately valued.

From the above provisions, it can be seen that the standard is different from the original system on whether depreciation is provided for fixed assets that are not needed. According to the standard, an enterprise should provide depreciation for all fixed assets "except for fixed assets that have been fully depreciated and continue to be used and land that is separately valued and recorded".

Fixed assets that do not require depreciation:

Fixed assets without depreciation:

1.Land; 2.Unused, unneeded and mothballed fixed assets other than houses and buildings;

3.fixed assets leased in the form of operating leases and fixed assets leased in the form of financial leases;

4.Fixed assets that have been fully depreciated and continue to be used;

5.Fixed assets for which maintenance fees are withdrawn in accordance with regulations;

6.Fixed assets that have been charged in a lump sum at cost;

7.fixed assets of bankrupt or closed down enterprises;

8.Other fixed assets that are not subject to depreciation as stipulated by the Ministry of Finance. Depreciation shall not be accrued for fixed property that has been scrapped in advance.

China's standards stipulate that enterprises should depreciate all fixed assets except in the following circumstances:

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

Land that is accounted for as a fixed asset is valued separately.

Fixed assets leased on an operating lease.

Fixed assets leased out on a financial lease.

Fixed assets that are in the process of being modernized.

Fixed assets held for sale.

Except for the above, depreciation is required.

There are 7 special cases in which depreciation is accrued (depreciation is required in the following cases):

Fixed assets leased out on an operating lease.

Fixed assets leased in the form of financial leases.

Fixed assets are not required.

Fixed assets that have reached the intended usable state but have not yet been settled at completion (the value of the asset is adjusted after the final accounts are completed, but the depreciation is not adjusted to the original).

Fixed assets that are retired due to changes in business tasks.

Production facilities that are out of service due to seasonal operations.

Equipment that is out of service due to repair (except for capitalization).

Depreciation is mentioned financially, because after all, with the update of technology and the aging and corrosion of equipment, it can't be said that the equipment you bought and put it in the warehouse for a year is still as valuable as the original, right? Therefore, the financial operation is the same to mention depreciation.

In addition, inventory is inventory, fixed assets are fixed assets, these two accounts are completely different, your company will temporarily spare fixed assets in inventory, itself is a mistake - the correct way should be to open a "standby" account under the fixed assets account to collect these equipment, when receiving from the "standby" detailed account to the "in use" detailed account can be just - but your company may have wanted to make the balance sheet look better, the current ratio is larger, so there is such a mistake

Of course, the method of depreciation can be considered by the use of the equipment, and it does not matter if you are flexible.

However, the tax law stipulates that unused fixed assets are not allowed to be charged with depreciation, because unused fixed assets are obviously not allowed to contribute to the taxable income of the current year, so they are not allowed to be depreciated - so in practice, many enterprises do not take depreciation on unused fixed assets in order to save trouble, and this alternative method is also reasonable.

Summary: **The spare fixed assets should be recorded in the fixed assets-spare account, and transferred to the corresponding detailed account of the fixed assets when they are received; As for depreciation, it is completely possible to withdraw it from the next month after receiving it.

Depreciation should also be accrued on unused and unneeded fixed assets, and the depreciation accrued shall be included in the current management expenses.

Fixed assets, houses, machinery and equipment, etc. are all depreciation that needs to be depreciated because the general amount of fixed assets is larger, the service life is longer, if a profit and loss is included in a period of profit and loss, the current profit of the enterprise will be greatly reduced, the burden is heavier, and it does not conform to the principle of accrual accounting, so it will generally be evenly allocated to the actual use period to calculate the cost of each period.

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 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.

Because the fixed assets of the enterprise participate in the production and operation for a long time and still maintain their original physical form, but their value will gradually be transferred to the cost of the products produced with the use of fixed assets, which constitutes the expenses of the enterprise. Thus, with the transfer of the value of fixed assets, they are compensated in the form of depreciation in the revenue from product sales.

Depreciation is also an expense, but this expense does not pay real monetary funds during the accrual period, but this expense is the expenditure that has been incurred in advance, and the income of this expenditure is reflected in the effective use period of the asset after it is put into use, whether it is on the accrual basis or the cash basis, the provision of depreciation is necessary! Therefore, if depreciation is not accrued or depreciation is not accrued correctly, it will have an incorrect impact on the calculation of product costs or operating costs of the enterprise.

1.Land; 2.Unused, unneeded and mothballed fixed assets other than houses and buildings;

3.fixed assets leased in the form of operating leases and fixed assets leased in the form of financial leases;

4.Fixed assets that have been fully depreciated and continue to be used;

5.Fixed assets for which maintenance fees are withdrawn in accordance with regulations;

6.Fixed assets that have been charged in a lump sum at cost;

7.fixed assets of bankrupt or closed down enterprises;

8.Other fixed assets that are not subject to depreciation as stipulated by the Ministry of Finance. Depreciation shall not be accrued for fixed property that has been scrapped in advance.

China's standards stipulate that enterprises should depreciate all fixed assets except in the following circumstances:

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

Land that is accounted for as a fixed asset is valued separately.

Fixed assets leased on an operating lease.

Fixed assets leased out on a financial lease.

Fixed assets that are in the process of being modernized.

Fixed assets held for sale.

Except for the above, depreciation is required.

There are 7 special cases in which depreciation is accrued (depreciation is required in the following cases):

Fixed assets leased out on an operating lease.

Fixed assets leased in the form of financial leases.

Fixed assets are not required.

Fixed assets that have reached the intended usable state but have not yet been settled at completion (the value of the asset is adjusted after the final accounts are completed, but the depreciation is not adjusted to the original).

Fixed assets that are retired due to changes in business tasks.

Production facilities that are out of service due to seasonal operations.

Equipment that is out of service due to repair (except for capitalization).

Hello, according to the Accounting System for Business Enterprises

Article 35 The following fixed assets shall not be depreciated:

1) Unused and unused fixed assets other than houses and buildings;

2) Fixed assets leased in the form of operating leases;

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

4) The land recorded as a fixed asset shall be separately valued in accordance with the regulations. Hope.