Hospital Accounting System (Caihui [2010] No. 27), Part III, Instructions for the Use of Accounting Accounts
1602 Accumulated Depreciation
...... hospitals should depreciate fixed assets other than books, and systematically apportion the fixed assets over their estimated useful lives. Costs. Hospitals should, in principle, depreciate fixed assets using either the average annual life method or the workload method, depending on the nature of the fixed assets. Once the depreciation method is determined, it shall not be changed arbitrarily. If it is necessary to adopt other depreciation methods, it should be submitted for approval in accordance with the regulations and explained in the notes to the accounting statements. Hospital depreciation of fixed assets does not take into account the estimated net residual value.
Hospitals should generally be depreciated monthly, the month of the increase in fixed assets, no depreciation that month, depreciation from the next month; the month of the decrease in fixed assets, the month of depreciation, no depreciation from the next month.
Fixed assets fully depreciated, regardless of whether they can continue to use, are no longer depreciated; early retirement of fixed assets, and no additional depreciation.
When depreciation of fixed assets under finance leases is provided, the depreciation policy should be consistent with that of own fixed assets. Can be reasonably certain that the expiration of the lease period will obtain ownership of the leased fixed assets, should be depreciated over the useful life of the leased fixed assets; can not be reasonably certain that the expiration of the lease period can obtain ownership of the leased fixed assets, should be depreciated over the shorter of the lease term and the useful life of the leased fixed assets.
If a fixed asset has been renewed or renovated and its useful life has been extended, depreciation should be recalculated in accordance with the cost of the fixed asset that has been re-determined after the renewal or renovation and the re-determined depreciable life.
The main accounting treatment of accumulated depreciation is as follows:
(a) When depreciation of fixed assets is withdrawn on a monthly basis, the portion of the amount formed by financial subsidies and funds for scientific and educational projects shall be debited to the account of "Funds to be offset", and the portion of the remaining amount of the amount of depreciation to be withdrawn shall be debited to "Medical operating costs" [medical operating costs] [medical operating costs] [medical operating costs]. Medical operation costs" [fixed assets for medical and auxiliary activities], "Administrative expenses" [fixed assets for administration and logistics management], "Other expenses" [fixed assets for operation and rental], etc., and according to the depreciation amount to be provided, debit the "Fund to be offset" account. Depreciation is credited according to the amount of depreciation that should be charged to the account.
Fixed assets such as buildings that have multiple uses and are used in a mixed manner shall be depreciated using a reasonable method of apportionment and credited to the relevant accounts.
(2) When fixed assets are disposed of or suffered a loss, according to the book value of the disposed of or suffered a loss of fixed assets minus the corresponding balance of the fund to be offset, debit the relevant account, according to the depreciation that has been drawn down, debit this account, according to the relevant balance of the fund to be offset, debit the account of the "fund to be offset". According to the book balance of fixed assets, credited to the "fixed assets" account.