Enterprises use fixed assets in the production and operation process and its wear and tear lead to a reduction in the value of only a certain residual value, and its original value and the difference between the residual value of its use in the life of the apportionment, is the depreciation of fixed assets. Determine the scope of depreciation of fixed assets is the premise of depreciation. [1]
The monetary estimate of the value of capital consumed during the period under examination. It is also known as capital consumption allowance in national income accounts. Depreciation of fixed assets is the systematic apportionment of accrued depreciation over the useful life of a fixed asset according to a defined method. Useful life is the expected life of a fixed asset, or the amount of products or services that can be produced or provided by the fixed asset. Accrued depreciation is the original cost of a fixed asset that is subject to depreciation, less its estimated net residual value. Fixed assets for which provision for impairment has been made should also be deducted from the cumulative amount of provision for impairment of fixed assets that has been made.