Depreciation formula. How to calculate depreciation: example

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2018-06-02 06:00:38

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In the course of business activities, fixed assets (hereinafter OS) firms are subject to wear. Intangible assets (hereinafter, IA), though I do not have the properties of physical wear, but it can depreciate. All OS and/or IA, which has society, over time, lose their original price. In order to extinguish the lost price of the fixed asset of the company calculated depreciation. Below is a definition of the concept, its meaning, periods and details of transfers in two types of accounting-tax (hereafter NSU) and accounting (hereafter BU), and formulas explaining the question of how to calculate depreciation.

Amortization

Depreciation-the periodic transfer (write-off) specific monetary values (amounts) accounted for as cash spending, which after a certain period of time should be equal znaczenie purchase (the initial price) of a particular fixed asset or intangible asset.
depreciation on fixed assets

Account for depreciation

In the chart of accounts BU there are two accounts depreciation – 02 and 05.

After buying the firm fixed asset or intangible asset, payment providers and to the state for taxes, the value of spending on this object refers to the account 08 (Capital investments or investments in non-current assets). Further, depending on the applied formula of depreciation the accountant periodically transfers the values on account 02 (depreciation of fixed assets) or on account 05 (depreciation of intangible assets) recognized by spending money. These expenses are included in expenses on the main (primary) activity for further damping.

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depreciation expense

Meaning of depreciation

Miscellaneous supplies purchased by the firm for the main activity, give a price immediately, because it is included in expenses on main activity immediately.

If a company bought a fixed asset or intangible asset, the accountant is unable to number the value of their purchase immediately, as it is not advisable for the following reason. Because cash expenses related to fixed asset or intangible asset must be attributed to the cost of the finished product on the main activity, a one-time deduction will cause the necessary excessive rise in price. Therefore, these deductions should be done by parts.

A fixed asset and intangible asset subject still another type of wear - moral. Such wear takes place in any case, even if the fixed asset or intangible asset not used at all. Obsolescence - is the aging of the fixed asset or intangible asset on the background of new developments, improve production technology and release new models OS. Obsolescence also needs to treat spending and in this case also be carried out depreciation and amortization.

calculation of depreciation

What property is recognized as property under depreciation?

For an FA or IA is given to depreciation in the event of:

  • If a firm has exclusive ownership of the object
  • If it is used by the firm to obtain economic benefits (income money)
  • If the object is the term intended, or exactly a specific useful (more SLEEP) than 12 months
  • If the object was purchased more than 40 000

The Timing of depreciation

All companies except those that are keeping the USN have to give the monthly amortization. For society and the right choice of formula for the transfer of depreciation, which is fixed in accounting policy.

Firms working on STS, you can determine the return periods of depreciation of the asset at their discretion, but it must be transferred no less frequently than once a year. If the impact of depreciation on intangible assets of firms operating under the simplified system works on a different principle. In respect of intangible assets such firms are allowed to deduct the values of expenses on purchase of intangible assets at a time when the inclusion of the object into account. The periods and formula for transfer of depreciation also needs to be fixed in the accounting policy of the company.

Depreciation start to give on the subject property firms next month, after a month of inclusion in the consideration companies.

date of depreciation

Amortization to BA and NSU with the General taxation system (core)

The Purpose of the NSU carried out at the firm with OSN, is to establish the magnitude of income tax. Due to the fact that the firm's profit-is revenue minus expenses, depreciation in this case is of great importance, as it is considered as a waste of money. The formula and the system returns the depreciation in BU and NSU when determining the taxable base (amount of tax).

Calculating depreciation is calculated on the basis of SLEEP one or the other of the fixed or intangible assets. Under SLEEP is the period during which a particular fixed asset or intangible asset capable of providing to the society the receipt. The conduct of BU SPI is determined by the company based on the technical characteristics of the object or of the estimated period of service (if by the first method it is impossible to determine). For NSU SLEEP is defined by specific regulations – the all-Russian Classifier of fixed assets (OKOF).

depreciation on plant

NSU applied the concept of "main funds" is the concept of "main funds" in BU. Main funds and the mainthe funds of the company are one and the same.

IN the BU, as already mentioned above, the property under depreciation becomes any property with an initial price of 40,000 rubles. When the definition of property under depreciation in the University are guided by the guide OCOF.

If BU attenuation is given separately for each fixed asset or intangible asset for its inclusion into account, the NGA attenuation is given immediately on all fixed or intangible assets.

Depreciation on the plant in BU occur regardless of whether the fixed or intangible assets in economic activity. NSU, on the contrary, depreciation is suspended if the object under depreciation for any reason suspended its participation in the economic activities of the company. The attenuation value given earlier (if the fact of depreciation) needs to be credited back to the cash receipts the company.

There are four formulas for the impact of depreciation in BU: linear reception, reception of the reduced residue, the method of enumeration the value of the numbers of years of SLEEP, the enumeration is proportional to the volume of produced goods. At NSU, there are only two formulas for the enumeration of depreciation: linear and nonlinear. While in the linear reception NSU used the same formula when you want to calculate depreciation, as in the linear reception of the BU.

Amortization to BA and NGA with STS

Under the simplified tax system to the process impact cushioning between NSU and BU also there is a difference. For small companies, leading NSU for USN “income minus expenses” works great from DOS, the principle of transferring the depreciation. In the spec-mode (USN) small firms are permitted to produce uniform depreciation charges for fixed assets or intangible assets within one year. In this system, if the object was put into operation in the first quarter of the fiscal year, then the expenses for its purchase in the form of depreciation are divided into the subsequent quarters of the year. If the object was put into operation in the last quarter of the fiscal year, then the expenses for its purchase is written off in the form of depreciation at one time. In BU under the special regime, as noted above, companies are permitted to choose periods returns the depreciation of their own.

Enumeration Formula of depreciation in BU

  1. Linear. Uniform impact attenuation during SLEEP. Formula of depreciation in a linear reception:
  • Na = (1 / CPI) * 100 %
  • A = PS * Na
  1. Accept a reduced balance. The return of the price is conducted in the residue (residual value), and uses multiplying factors (1, 2 or 3). Formula of depreciation while receiving the reduced balance:
  • Na = (1 / CPI) * 100 % * KP
  • A = PS * Na – in the 1st month
  • OS = PS -
  • A = OS * Na - in the 2nd and subsequent months
  1. Receive returns on the sum of the numbers of years of SLEEP. The calculation is the original price multiplied by a fraction. In the numerator of this fraction the number of complete years to the end of SLEEP. The denominator of the fraction – the value of the numbers of years of SLEEP. When the receiving attenuation value gradually declines each year. Formula of depreciation by the sum of the numbers of years of SLEEP:
  • A = PS * (KPL / SCSPI)
  1. Receive returns in proportion to the volume of produced goods. The depreciation rate under this method is calculated as the ratio of the amount of goods made per month, estimated or normative value of this indicator for the whole SLEEP. When the receiving attenuation value can be different from month to month. The formula of depreciation in the impact of depreciation proportionally to the volume of produced goods:
  • A = PS * (PVM / pcpi)
  • depreciation formula

The meaning of the abbreviations in the formulas:

  • Na – depreciation rate in %
  • A – the monthly depreciation value
  • SLEEP – the useful life in months
  • PS – the initial price (initial price)
  • CP – the boost factor
  • OS – the price in the balance (residual cost)
  • ALP – the number of complete years to the end of SLEEP
  • SCSPI – the sum of the numbers of years of SLEEP
  • FDA – number of goods (products) made for a month
  • PSE – the estimated or target quantity of the goods (products) for the entire SLEEP
  • how to calculate depreciation

Examples enumeration depreciation

Linear technique

The company bought the OS at the original price 180 000 rubles. SLEEP this OS was defined equal to 5 years (60 months).

Na = (1 / 60) * 100 % = 1,67 %

A = 180 000 * 1,67 % = 3006 rubles

Remember that any number with a percent – that number divided by 100, that is, in our case 1,67 % - to 1.67 / 100. In the expanded view of the last step will look like this: 180 000 * (1,67 / 100).

Receive a reduced residue

The company bought the OS at the original price 180 000 rubles. SLEEP this OS was defined equal to 5 years (60 months). The multiplying factor for the impact of depreciation was chosen equal to two.

Na = (1 / 60) * 100 % * 2 = 3,34 %

A = 180 000 * of 3.34 % = 6012 rubles in the first month of enumeration depreciation

OS = 180 000 - 6012 = 173 988 rubles

A = 173 988 * of 3.34 % = 5811,20 rubles (rounded upwards) in the second and subsequent months.

Receive returns on the sum of the numbers of years of SLEEP

The company bought the OS at the original price 180 000 rubles. SLEEP this OS was defined equal to 5 years.

(annual) = 180 000 * (5 / 1 + 2 + 3 + 4 + 5) = 60 000 rubles for the first year

A (monthly) = 60 000 / 12 = 5,000 rubles monthly for first year

(annual) = 180 000 * (4 / 1 + 2 + 3 + 4 + 5) = 48 000 rubles for the second year.

A (monthly) = 48 000 / 12 = 4000 rubles a month in the second year.

And so on.

Receipt of returnin proportion to the volume of produced goods.

The company bought the OS at the original price 180 000 rubles. The estimated volume of goods manufactured for 5 years, is 150 000 units. For the month was made 1800 units.

And = 180 000 * (1800 / 150 000) = 2160 rubles

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