Depreciation of fixed assets

Depreciation of fixed assets is a gradualInclusion of the value of objects of non-current assets in the price of products produced with their help. The amount of depreciation is one of the components of the costs incurred by the enterprise in the course of economic activity. The total amount of depreciation charges for fixed assets held by the enterprise is the fraction of the original value of these non-current assets. This value is the norm of wear. Depreciation of fixed assets is considered a criterion for reducing the value of a long-term asset. The condition of buildings, buildings and equipment, which is used in the production process by the enterprise, is gradually deteriorating. The essence of the depreciation method is the distribution of the value of fixed assets, for which they were put into operation, for the estimated period of use. When calculating the balance profit, the depreciation is deducted from the amount of the income received.

Depreciation of fixed assets is carried out inthe procedure set forth in Article 259 of the Tax Code. The amounts of accrued depreciation in determining the profit intended for taxation should be determined on a monthly basis. Depreciation charges are made individually for each object of non-current assets. The determination of the depreciation for the main asset has begun with the first day of the month after its commissioning. When the object of long-term assets is disposed of or when its cost is written off completely, the depreciation is stopped. This right is acquired by the business entity from the first day of the next month.

The Tax Code also defines methods of chargingdepreciation of fixed assets. The choice of methods for determining the wear remains with the enterprise. There are 2 ways to calculate depreciation - nonlinear and linear.

The first way is mandatory forobjects of long-term assets belonging to the eighth, ninth and tenth group - buildings, transfer devices and structures. The commissioning period for these fixed assets does not matter. The remaining assets of long-term assets can carry their original value by either of the two methods. The method of calculating depreciation, chosen by the enterprise for a separate fixed asset, does not change during the entire period of its being in the depreciable assets. Redistribution of the value of the object of long-term investments in the price of the produced products is made in accordance with the period of its useful use.

Depreciation of fixed assets, calculated withusing the linear method, is defined as the product of the initial price of each object by the rate of depreciation. If the non-current asset was overvalued, then in the formula it is necessary to pay attention to the first factor. In its quality will be the replacement cost.

If depreciation of fixed assets onnon-linear method, then the formula for its calculation included two factors. In this case, they were the residual value and depreciation rate of this particular object of non-current assets.

When using a fixed asset in conditions,When the environment is capable of aggressively influencing it, the enterprise has the right to apply an incremental factor. It increases the value of the depreciation rate, but not more than twice. The same right also arises when there is an increased shift in the use of the object of non-current assets.

By decision of the head of the enterprise,stipulated in the order on accounting policy, the taxpayer has the right to reduce the depreciation rates of fixed assets. Such a decision must be executed during the entire tax period.