Fixed assets are assets of the enterprise used for a long period to provide services, perform work, release products or for management purposes.
The organization takes into account assets as the main ones, subject to the following conditions at the same time.
The facility is used directly for the provision of services, performance of work, production, for use in management, and leasing. The term of use of the facility should be more than one year. Subsequent resale of the fixed asset is not permitted. The object in the future is able to give economic benefits to the enterprise.
Fixed assets include structures, various buildings, power and working units, equipment and machinery, transport, computers, equipment (household and industrial), perennial plantings, etc.
Accounting and methods of depreciation of fixed assets
During production or under the influence of the external environment, a gradual deterioration of fixed assets occurs, they transfer their initial value during the standard period of use to production costs. In accounting, this is displayed by accruing at the established depreciation rates. In this case, they talk about depreciation, which is a monetary expression of the reduction in the use of fixed assets by the initial cost of their technical, physical and economic qualities. In another way, depreciation expresses the process of accumulating money, which will be spent on updating obsolete objects. This is done by including depreciation in costs .
In the guidelines for accounting of fixed assets, such depreciation methods as the method of decreasing balance, the linear method, write-off of value using the sum of the numbers of years of useful time and write-off of value in proportion to the volume of work (produced products) are considered.
Linear depreciation methods
This method allows you to calculate the depreciation rate for the year in the usual manner. The source data for the calculation is the useful life (use) of the object. Formula: 1 / number of years * 100%. The depreciation amount for the year is calculated by multiplying the replacement initial cost by the calculated annual rate.
Non-linear depreciation method
Using the reduced balance, depreciation for the year is calculated by multiplying the depreciation rate by the value (residual) of the fixed asset, which was established at the beginning of the reporting year.
When the value is written off based on the sum of the values of the useful life years, the annual depreciation is determined by the product of the initial cost of the asset by the annual ratio, which is calculated by dividing the assets remaining until the end of the service life by the sum of the number of years of the asset's useful life.
The proportional write-off method calculates depreciation by multiplying the indicator of the volume of work performed (production) in physical terms for the reporting period and depreciation rates. The last factor is calculated by the ratio of the initial cost of the asset and the projected release of goods (works) for the entire useful life of the asset. In this case, the depreciation amount is calculated every month.
For taxation it is allowed to use different methods of depreciation. However, for a particular fixed asset, you must choose one method that will be constantly used in the calculation.
In general, in tax and accounting, it is recommended that depreciation be calculated on a straight-line basis. In this case, the data of both accounts will coincide, especially since the linear methods of calculating depreciation are the simplest.