How to calculate the depreciable life of the purchase of old equipment

Enterprises in November 2020 for the production needs of the purchase of a used production equipment has been used for 6 years, put into use that month. Accounting how to depreciate, tax law should be how to depreciate, but also need to take into account the provisions of the tax law, the minimum life of 10 years?

First, the accounting treatment

According to "Business Accounting Standard No. 4 - Fixed Assets" provides that enterprises should be based on the nature of fixed assets and the use of fixed assets, a reasonable determination of the useful life of fixed assets and the estimated net residual value. Over the useful life of the fixed assets, the depreciable amount (original value - estimated net residual value - provision for impairment) should be apportioned systematically in accordance with the determined method.

Enterprises to determine the useful life of fixed assets, should take into account the following factors:

(a) the expected production capacity or physical production;

(b) the expected tangible and intangible losses;

In summary, the accounting does not have a specific requirement for depreciation of the age of the fixed assets can be estimated according to the fixed assets can bring the economic benefits of the enterprise. The period of time is estimated to determine.

Second, the tax treatment

(a) general provisions

According to the "Regulations for the Implementation of the Enterprise Income Tax Law", Article 60 provides that, unless otherwise provided by the competent departments of the State Council in charge of finance and taxation, the minimum period for calculating depreciation of machinery, machines and other production equipment is 10 years.

The Enterprise Income Tax Law and its implementing regulations do not specify the minimum depreciation period for the purchase of second-hand equipment. The local regulations are as follows:

"Qingdao City, Shandong Province, State Taxation Bureau on the 2010 annual enterprise income tax remittance announcement on a number of issues" (Qingdao City, Shandong Province, State Taxation Bureau Announcement No. 1 of 2011) provides that, on the acquisition of enterprises have been used in the determination of depreciation of fixed assets, if you can get the previous session of the use of fixed assets, such as the initial purchase of evidence, such as invoices, If you can obtain evidence of the use of fixed assets in the previous session, such as the initial purchase invoice, the date of shipment and other evidence to prove that the number of years of use, you can depreciate the remaining life; on the inability to obtain the above evidence, should be used in accordance with the degree of wear and tear of the old and new fixed assets, the use of the situation, as well as whether or not to carry out improvements and other factors, such as a reasonable estimate of the extent of the old and the new, and then multiply with the statutory depreciation of fixed assets to determine the age of the fixed assets.

The Beijing Municipal Bureau of Taxation of the State Administration of Taxation (SAT) "Policy Guidelines on Enterprise Income Tax Practices (Phase I)" provides the following response: enterprises purchasing used fixed assets are generally depreciated in accordance with the useful life of the fixed assets, which refers to the estimated useful life for the continued use of the assets based on the tangible and foreseeable intangible wear and tear. ...... For enterprises to purchase the fixed assets have been used, the fixed asset useful life should not be shorter than the "Implementing Regulations," Article 60 of the minimum depreciable life minus the number of years of use after the remaining years.

(ii) Special provisions

According to the Notice of the Ministry of Finance and the State Administration of Taxation on Enterprise Income Tax Policies Relating to the Deduction of Equipment and Appliances (Cai Shui [2018] No. 54) and the Announcement of the State Administration of Taxation on the Implementation of Enterprise Income Tax Policies Relating to the Deduction of Equipment and Appliances (Announcement of the State Administration of Taxation No. 46 of 2018), an enterprise shall not be required to deduct from new equipment and appliances the amount of the new equipment or appliances that are newly constructed or newly manufactured between January 1, 2018 and December 31, 2020 period of newly purchased equipment, appliances, unit value does not exceed 5 million yuan, allowed a one-time cost of the current period in the calculation of taxable income deduction, no longer depreciated in annual calculation.

Which, "new" refers to the purchase time is new, the purchase of fixed assets can be old. Enterprises in the form of money purchased fixed assets, in addition to taking installments or credit purchases, the point of purchase according to the invoice issued to confirm the time; installments or credit purchases of fixed assets, the point of purchase according to the time of arrival of the fixed assets to confirm.

III. Conclusion

Accounting: Considering the expected production capacity, expected wear and tear and other factors, a reasonable estimate of the useful life of the equipment, depreciation in the remaining useful life of the equipment.

Tax treatment: general provisions, the depreciable life shall not be shorter than the minimum depreciable life of the tax law minus the remaining life of the equipment has been used in the case of the remaining depreciable life of 4 years; special provisions, if the unit value of the above equipment is not more than 5 million yuan at the time of purchase, you can be put into use in the month following the year of the month of the one-time pre-tax deduction. If there are tax differences, the tax adjustment should be made according to the provisions of the remittance.