Average annual life method (also known as the straight-line method)
Annual depreciation rate = (1 - estimated net salvage rate) ÷ Estimated useful life (in years) ÷ 100%Monthly depreciation = Original cost of fixed assets × Annual depreciation rate ÷ 12
The workload method
Depreciation of a unit of work = Original cost of fixed assets × ( 1 - Estimated net salvage rate ) / Estimated total workload Monthly depreciation of a fixed asset = Workload for the month of that fixed asset × Depreciation of a unit of work
Double the double workload Estimated Net Residual Value Rate )/ Estimated Total Workload Monthly Depreciation of a Fixed Asset = Workload of the Fixed Asset for the Month × Unit Workload Depreciation
Double Declining Balance Method (Accelerated Depreciation Method)
Annual Depreciation Rate = 2 ÷ Estimated Useful Life (in Years) × 100%Monthly Depreciation = Net Value of the Fixed Asset × Annual Depreciation Rate ÷ 12
Gross Annualized Depreciation Method (Accelerated Depreciation Method)
Summary Annualized Depreciation Method (Accelerated Depreciation) method)
Annual depreciation rate = remaining useful life / estimated useful life of the total number of years × 100 %Monthly depreciation = (original cost of fixed assets - estimated net salvage value ) × annual depreciation rate ÷ 12
Depreciation refers to the decline in the value of an asset. Depreciation in both business and national accounting means: a monetary estimate of the value of capital consumed over the period examined.
In national income accounts it is also called capital consumption allowance. Depreciation expense is the transfer value of fixed assets that are periodically charged to cost.
Fixed assets are used and their value is progressively replaced by production due to wear and tear of the fixed assets; instead, they are entered into the cost and expense of products in monetary terms by law, form part of the cost of products and period expenses, and are compensated for out of realized gains.
Because depreciation expense is not a significant portion of product cost, it is generally treated as an overhead and charged to the relevant comprehensive expense according to its economic use and where it is used.
For example, the depreciation of fixed assets used in the basic production workshop should be recorded in the depreciation expense item in the manufacturing cost ledger; the depreciation of fixed assets used in the auxiliary production workshop should be recorded in the auxiliary production cost ledger item; the depreciation of fixed assets used in the administrative department of the enterprise should be recorded in the depreciation expense item in the administrative expense ledger; the depreciation of fixed assets used in the sales department should be recorded in the product cost ledger item; the depreciation of depreciation should be recorded in the product cost ledger item in the administrative expense ledger item in the sales department. Depreciation expense for fixed assets used in the sales department shall be recorded in the relevant item in the detailed account of product sales expenses.
If the enterprise is the production of a single variety of products, all the costs incurred by the product are all borne by the product, the cost items can be set according to the economic content of the cost. In this case, all costs are direct costs, so depreciation expense can be charged directly to the "production costs" ledger in the "depreciation" cost item.
For modern technology-intensive enterprises, depreciation expense in the product cost will account for an increasing proportion. In this case, depreciation expense can also be shown as a separate cost item, if the enterprise, the workshop only produces a product, the depreciation expense can be directly into the production cost ledger "depreciation expense" item, if the enterprise, the workshop produces a variety of products, according to the proportion of machine hours will be depreciation expense in the allocation of various products after The cost of production is recorded in the production cost ledger.