Production equipment depreciation is charged to what account as follows:
Production equipment depreciation is charged to the manufacturing overhead account.
Production equipment belongs to the fixed assets, fixed asset depreciation is in the useful life of fixed assets, in accordance with the determined method of systematic apportionment of the amount of accrued depreciation. Accrued depreciation is the original cost of fixed assets that should be depreciated, less their estimated net salvage value. Fixed assets for which provision for impairment has been made should also be deducted from the cumulative amount of provision for impairment of fixed assets that has been made.
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. However, 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.
Depreciable life of production equipment
Machines, machinery and other production equipment, etc., which are stronger and more valuable, with a relatively long service life, the depreciable life is correspondingly longer, and the minimum depreciable life of such fixed assets is 10 years. The minimum depreciable life of electronic equipment is 5 years, taking into account the rapid changes in science and technology, technology update faster, the use of electronic equipment, relatively shortened life and other practical factors, the minimum depreciable life of electronic equipment from 5 years to 3 years, so that the enterprise's depreciation deduction forward.
The minimum depreciation period for appliances, tools and furniture related to production and business activities is 5 years. This type of fixed assets, is in addition to machinery, machines and other production equipment, but related to production and business activities, that is, not a direct tool of production, but in the production and business process to play an auxiliary role in the appliances, tools, furniture, etc., their useful life is relatively short, the minimum depreciation of its life of 5 years.