Each legal entity or individual in the process of activity comes across such a concept as depreciation (partial transfer of the value of fixed assets to manufactured goods).
Depreciation can be calculated using several methods. At the same time, the sizes of depreciation deductions are of great importance: on the one hand, they are included in the expenses of the enterprise as an element of costs, which in turn affects the financial result, on the other hand, they are considered one of the main sources of financial resources for the reproduction of fixed assets. As a result, the selected depreciation system affects the amount of taxes and the formation of own financial resources at the enterprise.
Methods for calculating depreciation are regulated by PBU. According to this provision, depreciation in accounting can be carried out by one of the four methods proposed in the regulation that is most beneficial for the enterprise.
Linear method
The essence of the method is to determine for each object of the fixed asset the term of its useful life, and a partial transfer of its depreciation value for this period. That is, to obtain the annual amount of depreciation, the value of the fixed asset is divided by the period of its use. When calculating depreciation using this method, the enterprise determines the period of use of the facility on its own, except in cases where this period is indicated in the technical documentation.
Cost reduction method
Depreciation is calculated based on the value of the object that remained at the beginning of the year, and the depreciation rate calculated in advance from the period of use of a particular object, as well as the coefficient set at the enterprise, which should not be more than 3. Therefore, the largest amounts will be charged at the beginning of use depreciable fixed asset. This is true for rapidly aging funds.
The method of writing off the value of a fixed asset by the sum of the number of years of its useful life
When calculating depreciation by this method, the annual amount is calculated from the book value of the asset to be depreciated and the ratio of years that remain until the end of the useful life of the object to the total amount of years of use of the depreciable object.
Production method
This method has a direct link to the volume of production of fixed assets. So, the annual amount of depreciation can be calculated as the product of the actual volume of production for the year and the production rate of depreciation. The production depreciation rate can be calculated by dividing the book value of the asset to be depreciated by the total expected volume of production produced by this asset. The production method is used for the group of assets for which the frequency of their use can be called the determinant of depreciation.
Regardless of the method chosen, depreciation of fixed assets should be calculated from the first day of the month after the month of commissioning of the facility. After an object is dropped out of the depreciable list or a full write-off of the object’s book value is calculated, starting from the first day of the month, which follows the month of fulfilling one of the two conditions, it stops.
Depreciation deductions during the reporting year should be accrued monthly in the amount that will be equal to 1/12 of the total accrued for the whole year. The accrued amounts in accounting should be shown in the period to which they are assigned, by debit of accounts responsible for accounting for production costs (20, 23, 25-26, 29, 44, 91, 97) for credit of accounts responsible for accounting for depreciation (02 )