Fixed assets are subject to depreciation on the premise that the fixed assets must be owned or controlled by the enterprise, if only leased fixed assets, the enterprise is not owned or controlled state, such as the enterprise leased a delivery truck is not subject to depreciation.
Depreciable fixed assets
(1) buildings;
(2) machinery and equipment in use, food instrumentation, transportation vehicles, tools and appliances;
(3) seasonal out of service and repair of out-of-service equipment;
(4) fixed assets leased out under operating leases and fixed assets leased under finance leases.
Non-depreciable Fixed Assets
(1) Fixed assets which have been fully depreciated and still continue to be applicable;
(2) Land which has been valued and separately accounted for in previous years.
(3) Fixed assets retired early
(4) Fixed assets leased under operating leases and fixed assets leased out under finance leases.
Expanded:
Fixed assets, along with intangibles, are used to produce a product, and also have a cost. Its value, which is his cost, needs to be factored into 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, that is, the depreciation of fixed assets.
The size of the depreciation of fixed assets is affected by the depreciation base, net salvage value, depreciable life, depreciation method and other factors, the "Accounting Standards for Business Enterprises" (referred to as the standard) and the "People's Republic of China *** and the State Enterprise Income Tax Law" and its implementing regulations (referred to as the tax law), respectively, on the extraction of depreciation of fixed assets have been made corresponding provisions.
Only by grasping the old factors of fixed asset depreciation can we ensure that the depreciation amount is correct and the tax is not affected. Now on the factors affecting the amount of depreciation of fixed assets from the standard, tax law for comparison.
Comprehensive grasp of the factors affecting the depreciation of fixed assets, can ensure that the depreciation amount is correct, but enterprises in the actual production and operation, but also encountered a number of exceptions, now from the following cases to explain how to depreciate.
Baidu Encyclopedia - Fixed Asset Depreciation