1. Determine the depreciation method: the cost of hospital home renovations can be accounted for using either the straight-line depreciation method or accelerated depreciation method. Straight-line depreciation method is the cost of renovation is spread evenly over each year of its expected useful life, the formula is: depreciation cost = (renovation cost - expected residual value) / expected useful life. The accelerated depreciation method spreads more of the cost over the first few years and less over the last few years.
2, to determine the cost of renovation: hospital housing renovation costs include materials, labor and so on. These costs need to be itemized and accounted for in order to accurately calculate depreciation expenses.
3, to determine the expected useful life: the expected useful life of the hospital housing renovation can be determined according to relevant regulations, experience or professional assessment. Generally speaking, the expected service life of hospital housing renovation is longer, can be more than 10 years.
4, to determine the expected residual value: the expected residual value is the estimated value of the renovation at the end of its useful life. The projected salvage value of hospital housing renovation can be estimated based on market value, depreciation rate and other factors.
5, calculate the depreciation expense: according to determine the depreciation method, the cost of renovation, the estimated useful life and the estimated residual value, you can calculate the annual depreciation expense. Depreciation expense can be apportioned on a monthly, quarterly or annual basis.
6, bookkeeping: According to the results of the depreciation expense calculation, it will be recorded in the financial accounting statements as depreciation of fixed assets, while it will be included in the cost accounting.