Overview of depreciation of fixed assets

I. Overview of depreciation of fixed assets
　　
Depreciation of fixed assets refers to the part of the value that gradually disappears when the fixed assets are in use. The value of loss of fixed assets should be apportioned within the validity period of the fixed assets to form a depreciation expense, which should be included in the cost of each period.
　　
(1) Nature of depreciation on fixed assets
　　
With the use of fixed assets, the value of fixed assets is gradually transferred to or constitute a cost for the products produced. Then, through the sales of products (commodities), the goods are withdrawn and compensated.
　　
There are two types of loss of Fixed Assets: tangible loss and intangible loss. Tangible loss refers to the loss of use value and value caused by the impact of use and natural strength of fixed assets. Intangible loss refers to the loss of fixed assets due to scientific progress.
　　
(2) Scope of depreciation
　　
The enterprise's fixed assets (including fixed assets for operation, fixed assets for non-operation, and rental of fixed assets) should generally be depreciated. Including: houses and buildings; machines and equipment in use, instruments and means of transportation; phased-out and phased-out equipment for major repairs; and fixed assets rented in financing and leasing mode.
　　
Non-depreciating fixed assets include unused and unused machines and equipment, rental of fixed assets in the form of business leasing, and delivery and use of previous fixed assets in construction projects; fixed assets that have been depreciated and continue to be used; fixed assets that have not been depreciated in advance and are scrapped; Other fixed assets (such as land) not depreciated by the State ).
　　
Ii. Depreciation of fixed assets
　　
Enterprises generally shall deduct depreciation for the current month. The added fixed assets in the current month will not be depreciated in the current month. The fixed assets reduced in the current month will be depreciated in the current month.
　　
The so-called full depreciation refers to the total amount of depreciation that has been raised for the fixed asset. The sum of depreciation shall be the original price of the fixed assets minus the estimated residual value plus the estimated clearing cost.
　　
(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.

1-estimated net salvage rate
Annual depreciation rate = ---------- × 100%
Expected Service Life

Monthly depreciation rate = annual depreciation rate = 12

Monthly depreciation = original fixed assets x monthly depreciation rate

(2) Workload Method
　　
The workload method is a method of accrued depreciation based on the actual workload.

Fixed Asset original value x (1-estimated net residual value)
Depreciation amount per workload = -------------------
Estimated total workload

The monthly depreciation of a fixed asset = the current month's workload of the fixed asset × the depreciation of each workload

(3) Progressive subtraction of double balances
　　
The "Double balance" method is used to calculate the depreciation of fixed assets based on the book balance of fixed assets at the beginning of each period and the "Double Straight-line" method without considering the net residual value of fixed assets.

2
Annual depreciation rate = ------ ×100%
Expected Service Life

Monthly depreciation rate = annual depreciation rate = 12

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

For fixed assets whose depreciation is accrued by the progressive subtraction of the double balance, the net fixed assets (excluding the net residual value) shall be amortized on average within two years before the depreciation period of the fixed assets expires.
　　
(4) sum of years
　　
The sum of years method, also known as the sum of years method, is to calculate the annual depreciation by multiplying the original value of fixed assets minus the net residual value by a decreasing score year by year, the numerator of this score represents the number of years that a fixed asset can still be used, and the denominator represents the total number of years of use.

Available years
Annual depreciation rate = ------------
Total years of expected service life
　
Or:

Expected Service life-years in use
Annual depreciation rate = --------------------
Estimated service life × (estimated service life + 1) limit 2

Monthly depreciation rate = annual depreciation rate = 12

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