Basic fixed assets knowledge

1) Definition of Fixed Assets

  Fixed assets refer to tangible assets with the following characteristics at the same time:

(1) held for the production of goods, provision of labor, leasing or management;

(2) The service life exceeds one fiscal year.

(3) Fixed assets are tangible assets

According to the definition of fixed assets, fixed assets have the following three features:

1. held for the production of goods, provision of labor, leasing or management

An enterprise holds fixed assets for the purpose of producing goods, providing services, leasing or operating management. That is, the fixed assets held by an enterprise are the labor tools or means of the enterprise, rather than products for sale. The "leasing" fixed assets refer to the fixed assets of machines and equipment rented by an enterprise by way of business leasing, excluding Buildings rented by means of business leasing. The latter belongs to the enterprise's investment real estate, not a fixed asset.

2. The service life exceeds the accounting year

The service life of a fixed asset refers to the estimated period of the enterprise's use of the fixed asset, or the amount of products or services that the fixed asset can produce. In general, the service life of a fixed asset refers to the expected period of use of a fixed asset. For example, the service life of a self-built building shows the estimated service life of the building. The service life of fixed assets, such as machines and equipment or transportation equipment, is measured by the quantity of products or services that can be produced or provided by such fixed assets, such as automobiles or airplanes, estimated service life based on its expected travel or flight mileage.

The service life of fixed assets exceeds the accounting year, which means that fixed assets are non-current assets. With the use and wear, the book value is gradually reduced by depreciation. Depreciation on fixed assets is an important part of subsequent measurement of fixed assets.

3. Fixed assets are tangible assets

Fixed assets have physical characteristics, which distinguish them from intangible assets. Some intangible assets may meet other characteristics of fixed assets at the same time, such as intangible assets held for the production of goods, the provision of labor, the service life of more than one fiscal year, but because it does not have a physical form, therefore, it is not a fixed asset.

 

Ii) classification of Fixed Assets

According to the Enterprise Accounting System and relevant tax and administration regulations, the enterprise's fixed assets are divided into three categories:

First, houses and buildings (including underground water, electricity, gas pipeline facilities, plant roads, and green projects );

2. machine equipment;

Third, general equipment, including a variety of automobiles, forklifts, excavators, loaders, lifting equipment, electrical equipment, electronic equipment, and large office furniture supplies.

 

I. depreciation period of some general-purpose equipment
1. 10 to 14 years of mechanical equipment
2. Power Equipment for years
3. Transmission Equipment for 15 to 28 years
4. animation Equipment 8 to 14 years
5. Automated Control and instrumentation automation, semi-automated control equipment 8 to 12 years
Computer 4-10 years
General testing instruments and equipment for years
6. Industrial Kiln
7. Tools and other production tools 9-14 years
8. Non-production equipment and instruments 18-22 years
TV set, photocopier, text processor 5 to 8 years
Ii. depreciation period of some special equipment
9. Special Equipment for the metallurgical industry, September 15 Years
10. Special Equipment for the Power Industry
Power generation and heating equipment 12-20 years
Transmission Line: 30 to 35 years
Distribution Line: 14 to 16 years
Transformer Power Distribution Equipment for 22 years
Nuclear power generation equipment: 20 to 25 years
11. Special machinery industry equipment for years
12. Special Equipment for the petroleum industry for years
13. Special Equipment for chemical and pharmaceutical industries, 7 to 14 years
14. 5 to 10 years of special equipment for Electronic Instruments and telecommunications industry
15. Special Equipment for building materials industry, 6 to 12 years
16. Textile and light industry equipment for years
17. Special mining, coal and forestry equipment for years
18. Special Equipment for the shipbuilding industry for years
19. Nuclear Industry Equipment for 20 to 25 years
20. Private equipment for public utilities
15-25 years of tap water
Gas-25 years
Iii. depreciation period of houses and buildings
21. Housing
30-40 years of production
Corrosion-producing room: 20 RMB 25 years
High-corrosion Production Rooms: 10 RMB 15 Years
Non-production room: 35 RMB 45 years
8 years old
22. Buildings
Hydropower Station Dam, 45 Gb/s, 55 years
Other buildings, 15 to 25 years

 

Iii) Depreciation of fixed assets

1. Average life Method

The average life method, also known as the straight-line method, is a method for balancing the depreciation of fixed assets to each period. The depreciation amount for each period calculated using this method is equal. The calculation formula is as follows:

Annual depreciation rate = (1-estimated net profit residual rate)/estimated service life × 100%

Monthly depreciation rate = annual depreciation rate = 12
Monthly depreciation = original fixed asset price × monthly depreciation rate
2. Workload Method
The workload method is a method of accrued depreciation based on the actual workload. This method can make up for the mean life method to only reuse time without considering the disadvantages of strength. The formula is as follows:

Depreciation amount per workload = {original fixed asset price × (1-residual value rate) estimated total workload the depreciation amount of a fixed asset month = the workload of the fixed asset in the current month × the depreciation amount of the first workload

3. Accelerated depreciation method
The accelerated depreciation method is also called the rapid depreciation method or the progressive depreciation method. It is characterized by increasing the depreciation in the early stage of the validity period of the fixed assets and reducing the depreciation in the later stage, thus accelerating the depreciation, to accelerate the cost of fixed assets in service life.

(1) Increment and subtract the double balance

The progressive subtraction of double balances is a method for calculating the depreciation of fixed assets based on the net book value of fixed assets at the beginning of each period and the double straight line method without considering the residual value of fixed assets. The calculation formula is as follows:

Annual depreciation rate = 2/estimated depreciation period × 100%

Monthly depreciation rate = annual depreciation rate = 12

Monthly depreciation = net book value of fixed assets × monthly depreciation rate

(2) sum of years

The sum of years method, also known as the sum of years method, is to calculate the annual depreciation amount based on the original value of fixed assets minus the net residual value and a decreasing score year by year, the numerator of this score represents the number of years that a fixed asset can still use, and the denominator represents the total number of years in use. Calculation formula:

Annual depreciation rate = Acceptable service life/sum of estimated service life

Or: annual depreciation rate = (estimated service life-years in use)/(estimated service life × {estimated service life + 1} ÷ 2 × 100%

Monthly depreciation rate = annual depreciation rate = 12

Monthly depreciation = (original fixed asset value-estimated net residual value) x monthly depreciation rate

Reference:Http://baike.baidu.com/view/1317335.htm