The regulations on the amortization period of long-term amortized expenses are as follows:
I. Introduction
Long-term amortized expenses is an account used to account for the enterprise has been expended but the amortization period of more than one year (excluding one year) of the various costs, including the fixed asset repair expenditures, Leased fixed assets improvement expenditure and other amortized expenses with an amortization period of more than 1 year.
Under the account of "Long-term Amortized Expenses", enterprises should set up detailed accounts according to the types of expenses, carry out detailed accounting, and disclose the amortized value, amortization period and amortization method according to the expense items in the notes to the accounting statements.
The second provision
1, the amortization period of long-term amortized expenses is greater than 1 year.
2, fully depreciated fixed assets of the alteration expenditures, according to the estimated remaining useful life of fixed assets amortization;
3, leased fixed assets of the alteration expenditures, according to the contractual agreement on the remaining lease term amortization;
4, fixed assets of the overhaul of the fixed assets, according to the estimated remaining useful life of fixed assets amortization.
Three accounting methods
Alteration expenditures on fully depreciated fixed assets, alteration expenditures on fixed assets under operating leases, overhaul expenditures on fixed assets in accordance with the provisions of the tax law, and other long-term amortized expenses. Long-term amortized expenses can be accounted for in detail by expense item.
Accrued
Long-term amortized expenses incurred by a small business are debited to long-term amortized expenses and credited to "bank deposits" and "raw materials".
Amortization
1. Expenditures on the alteration of fully depreciated fixed assets are amortized over the estimated useful life of the fixed assets.
From the definition, it can be seen that, in general, alteration and expansion can extend the useful life of the asset. For "fully depreciated fixed assets", the small business standards can not be adjusted for depreciation, so only through the long-term amortization of expenses accounted for, and amortized over the estimated useful life of fixed assets.
2. Expenditures on alterations to fixed assets under operating leases are amortized over the remaining lease term as agreed in the contract.
The lessee only has the right to use the asset for the period specified in the agreement, therefore, the alteration expenditure incurred on fixed assets leased under operating leases cannot be included in the cost of fixed assets, but can only be included in long-term amortized expenses, which will be spread evenly over the agreed lease term.
The principles and methods of accounting for "alteration expenditure on fixed assets leased under operating leases" are consistent with those of the Accounting Standards for Business Enterprises (ASBE) and the Accounting Standards for Small Enterprises (ASME).
3. Expenditures for major repairs of fixed assets in accordance with the provisions of the tax law are amortized over the remaining useful life of the fixed assets.
Enterprise Income Tax Law, Article 13, paragraph (c) of the fixed assets of the major repair expenditures, refers to expenditures that meet the following conditions:
1) repair expenditures to achieve the acquisition of fixed assets more than 50% of the tax basis;
2) repairs to extend the useful life of the fixed assets for more than two years.
Major repair expenditures in line with the above two conditions, when incurred, debit the "long-term amortized expenses" account, credit "raw materials", "bank deposits" and other subjects; the expenditure in the fixed assets can still be used. The expenditure is amortized over the useful life of the fixed assets, debit the cost of the relevant assets or current profit and loss account, credit "long-term amortized expenses" account.
4. Other long-term amortized expenses, amortized from the month following the month in which the expenditure is incurred, the amortization period shall not be less than three years.