Leasing, or long-term lease used in ancient times. The meaning of this operation was to use someone else's property (devices, tools, etc.) to obtain certain material benefits. For the temporary use of these funds, the owner owed a certain amount. Sometimes this amount of money could have a large size, so it was divided into certain shares and paid during the entire life of the property or item. Today, such deductions are called depreciation. Several types of accruals are used, but in combination with rent they use accelerated depreciation.
In modern conditions, the definition of “accelerated depreciation during leasing” means a method that involves accrual for depreciation of major objects in the first years of larger amounts than in subsequent periods.
This method is used quite widely. It is used both for fixed assets, the work of which is aimed at increasing the level of output of goods, and for mass replacement of worn and obsolete equipment.
Most often, accelerated depreciation is needed in order to update fixed assets (equipment, machinery, etc.) as soon as possible. Usually, the greatest efficiency comes from new machines and equipment only in the first years of use. It is for this period that maximum accruals are made. Subsequently, they are gradually reduced, increasing the cost of servicing the used machinery and equipment.
There are several ways in which accelerated depreciation of fixed assets is charged . This is a simple method of reducing the balance (sum of years) and double the reduction of the balance. The essence of the first method is to determine the useful temporary operation, which is measured in years. Then, for each year, a certain amount of money is charged, and at the final stage its specific amount is calculated. Then, the liquidation value is subtracted from this amount, multiplying the difference by the useful life, after which the product is divided by the sum of years.
Accelerated depreciation accrued by the method of double reduction of the balance is calculated by multiplying the balance of the book value of the asset by a constant percentage factor that is twice the proportional corresponding rate. In this case, we can give the following example: with a useful life of five years, the tariff (proportional) from the amortized fixed asset will be 20 percent, its double rate will be 40 percent. Typically, the latter value is used to multiply the carrying amount of the asset by the initial period of use.
The decision on whether accelerated depreciation should be applied when leasing (long-term leases) is made by the parties that have entered into this type of relationship - lessors and lessees. If an agreement has been reached between the parties on accelerated depreciation, then standard depreciation deductions must be adjusted upwards using the acceleration coefficient .
When depreciation is calculated using the linear method according to the accounting rules, the acceleration coefficient is not used, however, accelerated depreciation in this case can also be used - this is not prohibited. This is possible due to the fact that with this approach, the life of the leased property is reduced, and the risk associated with property tax is reduced.
Depreciation amounts accrued on leased assets are included in the costs of the sale and production of services, goods, works, which are taken into account in taxation.