Depreciation of fixed assets refers to the systematic distribution of depreciation amount according to certain methods within the service life of fixed assets.
Enterprises should reasonably choose the depreciation method of fixed assets according to the expected realization mode of economic benefits related to fixed assets.
The depreciation methods available are life average method, workload method, double declining balance method and life sum method. Once the depreciation method of fixed assets is determined, it shall not be changed at will. Fixed assets shall be depreciated on a monthly basis, and shall be included in the cost of related assets or current profits and losses according to their uses.
Fixed assets are depreciated monthly, and new fixed assets in the current month are depreciated next month; Fixed assets reduced in the current month shall be depreciated in the current month.
After the fixed assets are fully depreciated, whether they can continue to be used or not, they are no longer depreciated; Fixed assets scrapped in advance are no longer depreciated. Fixed assets that have been fully depreciated and can continue to be used should continue to be used, and the physical management should be standardized.
Subsequent expenditure
The follow-up expenditure of fixed assets refers to the renovation expenditure of fixed assets in the process of use.
Subsequent expenditures related to the renovation of fixed assets that meet the conditions for confirmation of fixed assets shall be included in the cost of fixed assets, and the book value of the replaced part shall be deducted at the same time. Subsequent expenditures of capitalized fixed assets are accounted for by the subject of "construction in progress".
When the follow-up expenditure of fixed assets is completed and reaches the scheduled usable state, it will be converted from construction in progress to fixed assets, and depreciation will be accrued according to the re-determined service life, estimated net salvage value and depreciation method.
Subsequent expenditures related to fixed assets, such as repair expenses, which do not meet the conditions for confirmation of fixed assets, are included in the current management expenses or sales expenses according to different situations when they occur.