The original value of the asset is the recorded value of the fixed asset, depreciation is the amount of depreciation into the depreciation column in the current amount of credit column. Accumulation is the cumulative number of accumulated depreciation. The net asset value is the recorded value of fixed assets less accumulated depreciation.
Fixed assets and intangible assets, which are used to produce products, also have a cost. Its value, which is his cost, needs to be included in the cost of the product. It needs to be amortized. This is why fixed assets are depreciated.
But, according to the accrual principle, the period over which his cost is amortized should not be just one year, but the period over which he will be used. Therefore a reasonable estimate of the cost to be amortized over each period is needed, which is the amount of depreciation and amortization per year. If all amortization is done directly at the time of purchase, the cost will be very high in the current year and the profit will be reduced, while the profit will be overestimated in the subsequent years. This is all disallowed by accounting.
One of the main characteristics of fixed assets is the ability to function continuously in a number of production cycles and maintain its original physical form, while its value is gradually transferred to the products produced with the wear and tear of the fixed assets, this part of the value of the fixed assets transferred to the products, is fixed asset depreciation.
Expanded:
I. The minimum depreciable life of houses and buildings is 20 years.
Houses and buildings as the most important fixed assets, its structure, attributes and other aspects of the relatively special, relatively long service life, relatively high value, the value of its use is also a relatively long process, according to the principle of income and expenditure ratio and other requirements, its depreciation should be relatively long;
So the minimum depreciation of houses and buildings for 20 years. This basically reflects the reality of the use of houses and buildings. This article refers to the houses, buildings, refers to production, business use and for employee life, welfare services, houses, buildings and their ancillary facilities, which houses, including factories, business premises, office premises, warehouses, accommodation, canteens, and other houses;
Buildings, including towers, pools, tanks, wells, racks, sheds (excluding temporary sheds, carports, and other improvised facilities), yards, roads, Bridges, platforms, wharves, docks, culverts, gas stations, as well as pipelines, chimneys, fences, etc., which are independent of houses and machinery and equipment;
Accessory facilities of houses and buildings refer to the ancillary facilities which are inseparable from the houses and buildings and do not have separate calculation of their value, including gas, water and oil pipelines in the houses and buildings, communication and power transmission lines, elevators, sanitary equipment, etc.
II. For airplanes, trains, ships, machines, machinery and other production equipment, the minimum depreciation period is 10 years.
Aircraft, trains, ships as a means of transportation, compared with other means of transportation, its performance is stronger, higher value, the use of a relatively long period of time, the depreciation of a correspondingly long period of time; machines, machinery and other production equipment, etc., but also has a longer life and other characteristics, depreciation of the year should be relatively long.
So the minimum depreciable life of such fixed assets for 10 years, including trains, including a variety of locomotives, buses, wagons, and do not calculate the value of the car facilities;
ships, including a variety of motorized ships and do not calculate the value of the ship's supporting facilities; machinery, machinery and other production equipment, including a variety of machines, machines, units, production lines and their supporting equipment, a variety of power, transmission, transmission equipment, and other production equipment. equipment, all kinds of power, transportation and conduction equipment and so on.
Baidu Encyclopedia - Depreciation of Fixed Assets