Early scrapping of fixed assets, adjusting the year's profit: According to the enterprise financial system, the net loss of fixed assets, scrapping, destruction and sale should be listed as non-operating expenditures. Some enterprises in order to adjust the current year's profits and pay less income tax, some fixed assets will be scrapped in advance.
Depreciation is a fixed asset in the use of the process, through the gradual depletion (including tangible and intangible losses) and transferred to the cost of the product or the cost of goods in the part of the value of the circulation fee. Accounting for depreciation is a cost-sharing process whereby the acquisition cost of a fixed asset is amortized in a rational and systematic manner over its estimated useful life.
There are the following methods:
1. Useful life method. The useful life method is a method of calculating depreciation based on the original value of fixed assets less their estimated net salvage value, averaged over their estimated useful lives. Use of life method, also known as the average annual method, straight-line method, it will be depreciated evenly over the use of the period of time. Therefore, the amount of depreciation calculated by this method is equal in each year or month of use.
2. Yield method. Yield method assumes that the service potential of a fixed asset will diminish with the degree of use, and therefore changes the useful life of a fixed asset in the average annual life method to the number of products or services that can be produced using this asset.
3, working hours method. This method is similar to the production method, just change the number of products or services produced to the number of hours worked.
4, accelerated depreciation method. Accelerated depreciation method, also known as declining depreciation expense method, refers to the depreciation expense of fixed assets per period, in the early mention more, in the late mention less, thus relatively accelerating the rate of depreciation.
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