In accordance with Article 60 of the Regulations of the Enterprise Tax Law: the minimum number of years for calculating depreciation of fixed assets is as follows:
(a) houses, buildings, 20 years;
(b) aircraft, trains, ships, machines, machinery and other production equipment, 10 years;
(c) appliances, tools, furniture and other equipment related to the production and business activities, 5 years ;
(iv) means of transportation other than airplanes, trains and ships, 4 years;
(v) electronic equipment, 3 years.
So asset valuation will be in accordance with the standard implementation, especially for fixed assets such as houses, buildings and other fixed assets to calculate depreciation of the minimum period of 20 years. The new Enterprise Income Tax Law has two major changes on the depreciation of fixed assets, one is the estimated net residual value, and the other is the depreciation period. It abolished the old income tax law unified provisions in accordance with the original cost of fixed assets 5% of the estimated net salvage value, but authorizes the enterprise according to the nature of the fixed assets and the use of independent and reasonable to determine, but once determined shall not be changed.
Article 59 of the Regulations for the Implementation of the Enterprise Income Tax Law (hereinafter referred to as the "Regulations") stipulates that depreciation of fixed assets calculated in accordance with the straight-line method is allowed to be deducted.
Enterprises should calculate depreciation from the month following the month in which the fixed assets are put into use; for fixed assets that have ceased to be used, the calculation of depreciation should stop from the month following the month in which they cease to be used.
Enterprises should be based on the nature and use of fixed assets, a reasonable determination of the estimated net residual value of fixed assets. Once determined, the estimated net residual value of fixed assets shall not be changed.