In the financial calculations of any normally working enterprise, depreciation charges are necessarily present. There is a constant deterioration of equipment, buildings, automotive vehicles, etc. How to compensate for the costs that will certainly arise during the restoration of fixed assets, where to get the money to carry out planned and other types of repairs? Here we come to the aid of depreciation, specifically calculated for such cases.
This type of deductions is very important for the operation of the enterprise and is included in the cost of production. As a result, the company receives a certain amount that can be spent on capital or other types of repairs. All equipment repairs are aimed at the restoration or modernization of the main fund or some part of it. Depreciated in monetary terms,
fixed assets are called “depreciation charges”.
The fixed assets laid in the design of the enterprise for fixed assets should be sufficient for the purchase of all necessary equipment and the construction of buildings and communications.
The practice of depreciation is widespread throughout the world. They are produced according to specially developed standards for this, which take into account the value of the fixed assets and its monthly depreciation.
The established depreciation rates allow not only to take into account the cost of fixed assets that are being decommissioned, but also to correctly calculate the cost of production. The last parameter is very important for any enterprise, it is involved in many calculations.
Properly calculated depreciation will ensure the restoration of fixed assets. They will also affect the profitability of products. Depreciation deductions continue to be deducted during the period of equipment conservation or when it is stopped due to the absence of orders or for any other reason. Depreciation deductions cease during the period of reconstruction of fixed assets, with a complete stop of the equipment.
The depreciation policy of any enterprise is very important for its normal operation in the market for manufactured products. It affects the depreciation carried out by the enterprise and affects the organization of equipment repairs. Moreover, it directly affects the competitiveness of products and the profitability of the entire enterprise. Depreciation policy aimed at reducing depreciation, may lead to a complete stop of the enterprise. This will happen due to lack of funds for equipment repair. At the same time, their overstatement is also dangerous, since in this case the cost of production will increase and, as a result, its competitiveness in the market will change. This can lead to loss of profit by reducing the number of products sold, which will also negatively affect the work of the entire enterprise.
In the financial documents of any enterprise there are also annual depreciation deductions, which are calculated taking into account the maximum number of products that this equipment produced for the reporting period, and the cost of the equipment itself. This indicator helps to adjust the monthly depreciation.