2019 New Standards Useful Life of Fixed Assets

my country's current "Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China" has express provisions on the depreciation of fixed assets of enterprises. Article 60 of it stipulates: Unless otherwise specified by the financial and tax authorities of the State Council, the depreciation of fixed assets shall be calculated. The minimum years are:

1, the minimum depreciation period for corporate houses and buildings is 20 years;

2. The minimum depreciation period for aircraft, trains, ships, machines, machinery and other production equipment owned by the enterprise is 10 years;

3. For appliances, tools, furniture, etc. owned by the enterprise and related to production and business activities, the minimum depreciation period is 5 years;

4. The minimum depreciation period for transportation vehicles other than airplanes, trains, and ships owned by an enterprise is 4 years;

5. The minimum depreciation period for electronic equipment owned by an enterprise is 3 years.

In addition, the depreciation life of equipment is different depending on the industry in which the enterprise is engaged. The depreciation life is generally less than the durability life of the equipment, that is, the service life. The reference depreciation life is generally 1-5 years added to this basis.

Extended information:

Enterprises should consider the following factors when estimating the useful life of fixed assets:

(1) The expected production capacity or physical output of the fixed asset.

(2) Tangible losses of the fixed assets, such as wear and tear of equipment during use, natural erosion of buildings, etc.

(3) Intangible losses of the fixed assets, such as the technical level of existing assets becoming relatively obsolete due to the advancement of new technologies, changes in market demand making products obsolete, etc.

(4) Laws or similar restrictions on the use of fixed assets.