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1, straight-line method of depreciation (Straight Line Method), also known as the average life method, refers to the average calculation of depreciation of fixed assets according to the expected life of a balanced apportionment of depreciation to the period of a method. Each period (year and month) of depreciation calculated using this method is equal.
2. Without considering the provision for impairment, the formula is as follows:
Annual depreciation rate of fixed assets=(1-estimated net salvage rate)/estimated useful life (years)
Monthly depreciation rate of fixed assets=annual depreciation rate/12
Monthly depreciation of fixed assets=original value of fixed assets*monthly depreciation rate
Case 1: Guanhua The Institute of Electronic Science and Technology (IEST) purchased a new Red Flag at a price of RMB 1 million, which is scheduled to be used for 10 years with a net salvage rate of 5%. What is the annual depreciation rate for this equipment according to accounting standards and related regulations?
According to the formula annual depreciation rate of fixed assets = (1 - expected net salvage rate) / expected useful life (years) = (1 - 5%) / 10 × 100% = 9.5%
3, Case 2: Guanhua Institute of Electronic Science and Technology purchased a tower crane, the acquisition cost of 120,000 yuan, the crane's service life of 10 years, the net salvage rate of 5%, according to the Accounting Standards and related provisions of enterprises
Based on the formula: annual depreciation rate = (1-5%)/10 × 100% = 9.5% Third year depreciation = 120,000 × 9.5% = 11,400 yuan