First, the straight line method
This depreciation method divides the original value of fixed assets by the expected service life, and accrues the same amount of depreciation every year.
Second, the workload method
The workload method is to calculate depreciation according to the actual use of assets. For example, the workload of machinery and equipment can be measured in hours or kilometers, and the depreciation expense of unit output is calculated according to the expected usage and converted according to the actual usage.
Third, the double declining balance method.
The depreciation expense accrued by this depreciation method is higher than that by the straight-line method every year, and gradually decreases with the increase of service life. The specific method is to calculate the straight-line depreciation amount that should be accrued every year, and then take twice the remaining net assets as the depreciation expense of the year, that is, the annual depreciation amount = (original value of fixed assets-accumulated depreciation) ×2/ estimated service life.
The meaning of fixed assets:
Fixed assets refer to items that are difficult to realize in the long-term production and operation of enterprises, including houses, machinery and equipment, vehicles, land, etc. In the production and business activities, these assets generally remain unchanged or change slowly for many years, forming the infrastructure and production capacity of enterprises, which is an important basis for enterprises to achieve profitability.
Fixed assets are characterized by long-term use value, long-term possession and use, unlike current assets, which can be realized quickly. Large investment in fixed assets will occupy a lot of enterprise funds. This means that the investment decision of fixed assets needs in-depth market and technical analysis. Enterprises need to consider their service life, depreciation and maintenance when managing fixed assets.
Baidu Encyclopedia-Depreciation of Fixed Assets