Straight line depreciation method means the write-off of the value of the fixed asset in the same proportional parts throughout the entire period of its use.
Note that depreciation is a gradual transfer of the costs incurred for the purchase or construction of an item of fixed assets to the cost of finished products, goods, works or services. In other words, with its help, the money that was spent on the construction or purchase of property is compensated.
Depreciation deductions are made during the time of the actual operation of the property, starting with the statement of the fixed asset object on the balance sheet of the company in connection with the commissioning of this object and ending with the deregistration of the property.
Depreciation calculation methods
There are four methods for calculating depreciation. One of these methods is linear, the other methods are non-linear methods. Note that due to its ease of use, the linear method is the most widely used method in practice.
Advantages and disadvantages of the linear method
The main advantages of the straight-line depreciation method:
Ease of calculation. The calculation of the amount of deductions must be made only once at the beginning of the operation of the property. The amount received will be the same for the entire period of operation.
Accurate write-off of the value of property. Depreciation deductions occur for each specific object (unlike non-linear methods, where depreciation is charged on the residual value of all objects of the depreciation group).
Equal transfer of costs to prime cost. With non-linear methods, depreciation is greater in the initial period than in the subsequent one (write-off occurs in descending order).
The advantage is that the legislation provides for the possibility of using this method both in accounting and in taxation, which makes it possible to avoid the occurrence of differences according to PBU 18/02.
The linear method is convenient to use in cases where it is planned that the object will bring the same profit during the entire period of its use.
The main disadvantages of the linear method:
The method is inappropriate to apply to equipment subject to rapid obsolescence, since the proportional write-off of its cost does not provide the proper concentration of resources needed to replace it. Production equipment is characterized by a decrease in productivity with an increase in the number of years of operation. As a result, it will require additional costs for maintenance and repair, due to breakdowns and failure. Meanwhile, depreciation will be written off evenly, in the same amounts as at the beginning of operation, since the linear method does not provide otherwise. The cumulative amount of property tax over the entire life of the property, to which the straight-line method is applied, will be higher than with non-linear methods. For enterprises planning to quickly update production assets, it will be more convenient to use non-linear methods.
Linear depreciation method in accounting
Any company has the right to independently choose the method of writing off depreciation. According to the current legislation, fixed assets are divided into ten depreciation groups depending on the time period of their operation.
At the same time, the linear depreciation method must be applied to buildings, structures and transmission devices belonging to three groups, namely:
Group VIII - objects with a service life of 20-25 years;
Group IX - objects with a service life of 25-30 years;
X group - objects with a service life of more than 30 years.
For the rest of the objects, you can apply any method of depreciation at the choice of the organization, which must be recorded in the order on accounting policy.
Note that the straight-line depreciation method can be applied both to new property and to objects that were previously in use (operation).
Linear depreciation method in tax accounting
According to Art. 259 of the Tax Code for the purposes of tax accounting, taxpayers can use one of the proposed methods when writing off depreciation - linear or non-linear.
If a straight-line depreciation method is used, the amounts of deductions are determined monthly and for each object separately (clause 2, article 259).
The methodology for calculating depreciation amounts must be fixed in the working accounting policy of the company. In this case, you need to remember that for property from 8-10 gr. (structures, buildings, intangible assets, transmission devices) it is allowed to choose only the straight-line depreciation method. Note that the methodology for calculating depreciation in tax accounting established by the organization can be changed, but only from the beginning of the next tax year. At the same time, it is possible to change the non-linear method to the linear depreciation method once every 5 years (clause 1, article 259).
How to calculate the depreciation of fixed assets using the straight-line method
To determine the amount of monthly depreciation deductions in a linear way, it is necessary to have data on the initial cost of the object, to establish and calculate the depreciation rate.
1. The initial cost of the object
The initial cost of an object is calculated by adding up all the costs of its acquisition or construction.
2. Useful life (operating period)
The useful life (operating period) is established by studying the list (classification) of fixed assets, which are divided into.
If the object is not listed, then the term of its operation is assigned by the organization depending on:
predicted time of use;
expected physical wear;
expected operating conditions.
3. Depreciation rate formula
The annual depreciation rate is calculated using the formula:
K \u003d (1: n) * 100%,
where K is the annual depreciation rate;
n is the service life in years.
If you need to find out the monthly depreciation rate, then the result is divided by 12 (the number of months in a year).
4. The formula for calculating depreciation using the straight-line method is as follows:
A \u003d PS * K / 12,
where A is the amount of monthly depreciation;
PS - the primary cost of the property;
K - depreciation rate calculated according to the formula in the 3rd paragraph.
Based on these formulas, it becomes clear that the main difference of this method is the uniform transfer of the value of property to the costs of the company.
Thus, it is advisable to use the straight-line depreciation method if economic activity is stable, brings a uniform profit and does not require a quick write-off of fixed assets.
Linear calculation is not suitable for calculating depreciation for quickly wearing out objects, with high intensity of production processes, as well as with premature obsolescence of property.
If new productions are being developed, it is recommended to slow down the depreciation write-off; and in cases where the organization does not lack cash and can timely renew obsolete assets, accelerated depreciation with the subsequent replacement of decommissioned equipment, machines, tools, etc. will be optimal.
Example. Straight line depreciation method
The organization purchased passenger vehicles for 400,000 rubles. excluding VAT.
According to the rules of the Classification, the machine is included in 3 gr.
The useful life is set at 48 months.
To calculate depreciation monthly/annual amounts, you must determine the annual depreciation rate and then the amount of depreciation.
Annual depreciation rate = 1/4 = 25%;
monthly depreciation rate using the straight-line method, expressed as a percentage = 1/48 = 2.083%,.
Monthly depreciation = 400,000 rubles. x 2.083% \u003d 8332 rubles.
Annual depreciation = 400,000 rubles. x 25% = 100,000 rubles.
If the initial cost of fixed assets and the useful life in tax accounting are set to be similar, the organization will recognize the monthly expense in the same amount when calculating the income tax base.
Linear depreciation postings
When calculating depreciation, standard postings should be made monthly, depending on where the fixed asset or intangible asset is used. The accounts used depend not only on the type of depreciable property (for loan 02 - for fixed assets, and 05 - intangible assets), but also on the type of its use. For example, depreciation of production facilities is usually reflected in the debit of account 20, and trading organizations usually accrue depreciation in the debit of account 44. The attribution of depreciation to expenses in accounting is reflected by the following entries:
Debit of the account Credit of the account - the depreciation of the object for the main production is reflected.
Debit account Credit account - reflects the depreciation of the facility for auxiliary production.
Debit of the account Credit of the account - write-off of depreciation of the object of general production purpose is reflected.
Debit of the account Credit of the account - write-off of depreciation of the object of general economic purpose is reflected.
Debit of the account Credit of the account - write-off of depreciation of the object of trading companies is reflected.
Debit of the account Credit of the account - write-off of depreciation on the object received in rent is reflected.
Account debit ( , , , ) Account credit - write-off of depreciation on intangible assets is reflected.
Depreciation procedure
With a uniform depreciation calculation, they are guided by the general rules for the product of depreciation deductions, namely:
depreciation should be charged from the 1st day of the month following the month of putting the property into operation;
it is necessary to make depreciation deductions on a monthly basis and take into account these expenses in the period in which they are made;
the grounds for suspension of depreciation deductions are the conservation of the object for a period of 3 months or its long-term repair (more than one year). At the same time, depreciation deductions begin again immediately after the return of this property to operation;
depreciation deductions are terminated from the 1st day of the month following the month when the property is written off the balance sheet.
Depreciation of used property
Often organizations acquire fixed assets that were in operation. The straight-line depreciation mechanism for such facilities will be the same as for new property. The only difference for the fixed assets that were in operation is the special calculation of the useful life. In order to determine it, you need to subtract the number of years (months) of its actual use from the service life established by the previous owner.
The straight-line method of calculating the depreciation of fixed assets and intangible assets is the most common method in accounting and tax accounting. The use of this method is appropriate when the economic benefits from the use of the depreciable item flow evenly over the useful life, or the flow of such benefits cannot be measured reliably. Also, the use of a linear method in tax accounting, in contrast to a non-linear one, in some cases. We will show how to calculate depreciation in a linear way using an example in our consultation.
Straight line depreciation formula
For the linear depreciation method, we will give formulas that allow us to determine the monthly depreciation amount (AM) of fixed assets (OS) and intangible assets (IA) in accordance with the procedure provided for by PBU 6/01, PBU 14/2007 and Ch. 25 of the Tax Code of the Russian Federation:
| Straight line depreciation formula | ||
|---|---|---|
| in accounting | in tax accounting||
| A M = C * K Where C is the initial or replacement cost of an asset or intangible asset; |
||
And how to calculate the depreciation rate in a linear way in tax accounting? This rate, as in accounting, depends on the useful life. Therefore, the calculation of the depreciation rate in a linear way according to the rules of Ch. 25 of the Tax Code of the Russian Federation looks like this: 1 / SPI * 100%, where SPI is the useful life in months.
Despite the fact that the formulas for calculating depreciation using the linear method in accounting and tax accounting at first glance are different, the procedure for calculating depreciation values is essentially the same.
Therefore, to calculate linear depreciation, the formula for determining the monthly amount (A) for simplicity can be expressed as follows:
A = C / SPIwhere C is the cost of the depreciable object, from which depreciation is calculated;
SPI - the useful life of the depreciable object in months.
Straight-line depreciation: example
We will show how to calculate depreciation using a straight-line method using an example. It does not matter whether it is necessary to preliminarily determine the annual amount of depreciation in a linear way (as for fixed assets) or the monthly amount is immediately calculated, the final values of the monthly amounts in accounting and tax accounting will still be the same.
To confirm, we will calculate the depreciation of a car in a linear way in accounting and tax accounting, and also show how to calculate depreciation in a linear way in accounting for intangible assets (for example, the author's exclusive right to a computer program).
To calculate depreciation charges using the straight-line method, we use the same input data for the OS object (garbage truck) and intangible assets (exclusive right to the program): the initial cost is 1,750,000 rubles. SPI - 10 years (120 months). In order to determine the amount of depreciation deductions in a linear way, we will use the above formulas.
And the calculation of depreciation deductions in a linear way is given in the table.
22.08.2019
All enterprises that have on their balance sheet are required to keep records of depreciation. To do this, every month in accounting, postings are made to write off part of the cost of fixed assets as depreciation.
In addition, the accountant is faced with this concept during revaluation, modernization, disposal, write-off of objects. Each of these operations entails the need to reflect double entries in the depreciation accounts.
Accounting for depreciation deductions of fixed assets
Depreciation is a unit of depreciation in terms of money. That is, this is a part of the cost of the OS object, which is monthly included in the cost of products, services, goods.
Through depreciation, there is a gradual transfer of the value of the fixed asset, for which it is listed in accounting, to products and goods.
Ultimately, the funds spent on the acquisition of fixed assets are returned to the company after receiving payment from buyers, customers for the acquired values.
This process is gradual and continues throughout the useful life. To account for it, the accountant makes monthly postings on specially designed accounting accounts.
As long as the fixed asset is listed on the balance sheet of the enterprise, the accountant must conduct depreciation monthly. This procedure is carried out until the moment of complete wear, write-off due to unsuitability, breakdown or transfer to other persons.
The depreciation accumulation process is suspended only in two cases:
- The OS being on conservation, provided that its duration exceeds 3 months.
- Restoration, reconstruction of the object, if this process takes more than a year.
If a decision is made to sell the object or write it off, then the accountant determines the residual value of the asset. To do this, the depreciation accrued for the entire period is written off by postings to account 01, where the residual parameter is determined.
If during the operation of the equipment or other object the initial cost changes due to revaluation, then the depreciation accumulations are also recalculated and the necessary postings are made.
Thus, the accountant is faced with the need to reflect postings for accounting for depreciation of fixed assets in the following cases:
- carrying out monthly depreciation deductions;
- changes in accrued deductions due to (may either increase or decrease);
- write-off of a depreciable object as unnecessary (physical or moral wear and tear, breakage, irreparable defects);
- disposal of a fixed asset to a third party (sale, donation, contribution to the authorized capital of other enterprises).
What account are they on?
For the purpose of accounting for depreciation accumulations for fixed assets, account 02 is provided in the Plan:
- For debit - shows the amount of depreciation for decommissioned and disposed of objects, as well as a decrease in savings due to a depreciation of the value of the fixed asset.
- For a loan, the accrued depreciation included in the cost is collected, and an increase in accumulated deductions due to revaluation is also reflected.
On account 02 it is possible to open sub-accounts:
- 1 - deductions for own objects available on the balance sheet are shown;
- 2 - depreciation is reflected for fixed assets taken on a long-term lease and on the balance sheet in leasing. Accounting and.
On account 02, it is necessary to provide analytical accounting for each individual fixed asset or group of homogeneous objects.
This will provide the necessary information to analyze the effectiveness and feasibility of using fixed assets.
Monthly double entries on account 02 upon accrual
From the month immediately following the month in the organization, it is necessary to consider depreciation and write off its postings to expenses.
The accrual of depreciation charges is carried out on the credit of account 02 in correspondence with the debit of the accounts of the enterprise's cost accounting.
The choice of the corresponding account depends on the purpose and place of use of the fixed asset object, as well as on the nature of the enterprise's activity - trading, manufacturing.
Depreciation can be debited to the following accounts:
- 20, 23 - for production facilities, equipment engaged in the main, auxiliary production;
- 44 - for fixed assets operated by trading companies;
- 91 - for fixed assets leased.
Posting table for depreciation of fixed assets:
Postings are made monthly for the entire useful life of the accounting period to which they relate. It does not matter what the financial result of the enterprise.
The accumulation of deductions should not stop, except for long-term cases of restoration and conservation.
The amount for which the posting is made in accounting is calculated by one of the established four methods.
How is it debited upon disposal?
The need to deregister a fixed asset arises for various reasons:
- Moral depreciation - outdated equipment.
- Physical wear and tear - the STI has ended, or the object has worn out so much that it is no longer suitable for use.
- Breakdown - if its repair is not feasible for economic reasons or is not possible.
- Transfer to other persons on the side during the sale, donation, inclusion in the Criminal Code of other companies.
- Shortage identified after inventory.
Regardless of the reason for deregistration of a fixed asset, the procedure is the same:
- A separate sub-account 11 is opened on account 01.
- The initial or replacement cost of fixed assets is written off to the debit of an open subaccount.
- The accumulated depreciation is transferred to the credit of the open sub-account.
- The residual value is determined and written off depending on the reason for deregistration of fixed assets.
The transfer of depreciation charges accumulated on the date of disposal or write-off is carried out using the accounting entry: Dt 02 Kt 01-11 - the amount of accrued depreciation is written off.
When revaluing
Revaluation is a procedure for recalculating the value at which fixed assets are listed on the balance sheet. This is done to match the real market prices.
The result of this process can be an undervaluation when the initial cost increases, and a markdown when it decreases.
The cost indicator for which fixed assets are accounted for in the debit of account 01 varies depending on the results of the revaluation - it increases or decreases. The resulting value will already be called the replacement value.
The depreciation accumulations on account 02 also change accordingly. Moreover, a proportional calculation of the amount by which it is necessary to reduce or increase the accrued depreciation is carried out, depending on changes in the replacement cost of the fixed asset.
Formula for recalculating depreciation:
Recalculated A. \u003d Recovery st-t * Accumulated A. / Initial st-t.
Table with postings for accounting for depreciation during revaluation:
Example
Initial data:
On February 20, 2019, the company bought a machine, the amount of all costs amounted to 720,000 rubles.
The useful life for the machine is set to 6 years = 72 months.
Depreciation is calculated on a straight-line basis, the amount of monthly deductions = 10,000.
What postings should the accountant reflect for the period from February to June 2019?
Solution:
Postings on depreciation charges must be started from March 1, 2019 to June inclusive.
Suppose that the company works on the simplified tax system and does not pay VAT.
Wiring table:
| date | Sum | Operation | Debit | Credit |
| 20.02 | 720 000 | The machine is put into operation as OS | 01-1 | 08 |
| 01.03 | 10 000 | 1 month depreciation included in production costs | 20 | 02 |
| 01.04 | 10 000 | Depreciation deductions for 2 months of use | 20 | 02 |
| 01.05 | 10 000 | Depreciation for 3 months of operation | 20 | 02 |
| 01.06 | 10 000 | Depreciation for 4 months | 20 | 02 |
| 10.06 | 720 000 | Write-off of the initial cost of the fixed asset in connection with its sale | 01-11 | 01-1 |
| 10.06 | 40 000 | Accumulated deductions for the object written off | 02 | 01-11 |
| 10.06 | 680 000 | The machine is for sale | 91-2 | 01-11 |
| 10.06 | 500 000 | Reflected the sale price of the machine | 62 | 91-2 |
| 180 000 | The financial result of the transaction is a loss | 99 | 91-2 |
How is the overcharge for the previous period reflected?
If the depreciation for the previous period was calculated incorrectly in an excessive amount, then the errors must be corrected. At the same time, it is important in which period they were admitted - the current year or the past.
The mechanism for correcting accounting errors is prescribed in PBU 22/2010.
If the depreciation amount is excessively accrued, then it is necessary to reverse the extra accruals with red entries on those accounts for which incorrect entries were made.
If a mistake is made in the current year
Depreciation is corrected until the closure of accounts 20 or 44 (depending on where the savings are taken into account):
Reversal posting: Dt 20 (44) Kt 02 - for the amount of overcharged depreciation.
Correction after closing account 20 (or 44):
In addition to the reversal operation indicated above, account 90 must be adjusted to reflect expenses that are not accepted for tax accounting.
Reversal posting: Dt 90.3 Kt 20 for the overcharged amount.
If the overcharge occurred in the year ended
Adjustments must be made to account 91 - posting: Dt 02 Kt 91.
conclusions
Fixed asset depreciation accounting consists in reflecting monthly deductions on account 02 in correspondence with cost accounting accounts (for sale or production).
When a fixed asset is deregistered, the accumulated deductions are also written off.
Accumulations on account 02 may change when the value of the object changes as a result of revaluation, in this case the accruals are recalculated. Additional accrued depreciation is reflected in additional capital, reduced depreciation is included in other income.
Almost every commercial organization uses in its economic activity fixed assets, which include both real estate and equipment, vehicles, etc. In accordance with the regulations of the Federal legislation, business entities must regularly accrue depreciation on fixed assets that are listed on them and put into operation. An exception is fixed assets that are on conservation.
Definition
Depreciation is transfer process the cost of fixed assets to the cost of manufactured products. During the operation of the OS, their natural wear and tear occurs, which reduces their cost.
To reduce their financial losses, each organization lays the amount of depreciation in the cost of manufactured products. As a result, the costs incurred for the acquisition of fixed assets are reimbursed to organizations through depreciation charges.
Depreciation is charged monthly, in the manner prescribed by Article No. 259 of the Tax Code of the Russian Federation. Depreciation is charged on property with a useful life exceeding 12 months and the initial cost of which is more than 100 000 rubles:
- buildings, structures;
- equipment;
- and specialized transport;
- objects of intellectual property and other property, which, according to its parameters, belongs to the category of fixed assets.
No depreciation is charged on the following property of organizations:
- capital construction objects (unfinished);
- inventory items;
- Earth;
- objects belonging to the category of natural resources (water, subsoil, etc.).
Each commercial organization must register each fixed asset acquired, received free of charge or transferred in the form of a founding contribution at the initial cost. This requirement is regulated by article No. 257 of the Tax Code of the Russian Federation.
At the time of registration, the accountant is obliged to allocate fixed assets to the appropriate groups. In this case, it plays a crucial role, which is determined by the business entity independently on the date of their commissioning.
To understand what depreciation is, you need to explore this question with an example.
A commercial organization purchased a car for carrying out business activities. Its cost is 30,000 dollars. When registering, a useful life of 5 years was set for this vehicle. Every month, the accounting department will have to calculate, the amount of which will gradually accumulate in the account of the depreciation fund.
After 5 years from the date of putting the car into operation, a commercial organization can sell it at the residual value. In return, the company can buy a new car, spending money from the depreciation fund on its purchase, adding to them the amount received from the sale of the old car.
Difference for accounting and tax accounting
Business entities in tax accounting, when calculating depreciation, must rely on a legal framework that does not apply to accounting.
In this case, we are talking about depreciable fixed assets, the cost of which should be written off gradually over time. At the same time, this process must necessarily reflected in tax records.
Those fixed assets, the cost of which is not subject to write-off, do not belong to the category of depreciable fixed assets. Business entities should include their cost in the structure upon commencement of their operation..
In practice, commercial organizations manage to carry out both tax and accounting depreciation of fixed assets in parallel. In boo. accounting, depreciation can be charged immediately after the fixed assets have been put into operation, and in tax accounting, this process is carried out monthly, in certain amounts. The process of terminating the write-off of the cost of fixed assets in both accounts is carried out according to the same criteria.
Business entities should take into account some nuances:
- In accordance with the regulations of the Federal legislation, it is allowed to include no more than 10% of the initial cost of the OF in the composition of the expenses of the reporting period.
- Legislation allows to include no more than 30% of the initial cost of fixed assets (groups 3-7) in the expenses of the reporting period.
- The benefit approved by the Federal Law does not apply to the property that was received by a commercial organization free of charge.
- If a business entity decides to take advantage of this benefit, then they should immediately distribute the relevant fixed assets into groups (depreciation) at the initial cost, confirmed by the primary documentation. In doing so, they will need to deduct the depreciation premium.
- In the event that a commercial organization decides to sell such facilities within 5 years from the date of commissioning, it will need to restore all previously written off costs and include them in the tax base of the reporting period.
Why do you need it in 2018
In 2018, business entities should take into account the new version of the OKOF Classification. It defines 10 cushioning groups, in some of them the OF has changed. It follows from this that commercial organizations will have to determine other useful lives of the fixed assets for these groups.
The new systematization procedure is applicable to those facilities that have been in operation since 2017.
In order to correctly determine the depreciation group of the fixed asset, the accountant of the organization needs to carefully study both the OKOF, as well as perform a series of actions:
- It is determined whether a particular property belongs to the category of fixed assets (cost more than 100,000 rubles, service life more than 12 months).
- A depreciation group is selected (for this, various criteria are taken into account).
- The correct useful life is established and recorded in the relevant documentation.
Depreciation methods
Commercial organizations can use in the depreciation process several techniques:
- Linear. If the company decides to apply this depreciation method, then it will need to evenly transfer the cost of the acquired property to the depreciation fund. In this case, the costs associated with the purchase will be included in this amount. In the future, in order to calculate the residual value of the object, it will be necessary to subtract the amount accumulated on a separate account for the entire period of operation from its initial cost.
- Annuity. If a business entity decides to use this depreciation method, then it will have to reduce the residual value of fixed assets by determining the percentage (depreciation) and its annual deduction to the residual price. This technique can be adjusted at each enterprise depending on its production features:
It should be borne in mind that some types of OS are subject not only to physical, but also to obsolescence. For example, computer equipment, printers, faxes, etc. If an organization registers equipment that was in operation, then it needs to take into account its residual value, as well as depreciation rates that will be tied to the useful life that remains with this object.
Economic entity
For each commercial organization, the depreciation fund closely related with the residual price of manufactured products. In the event that even the slightest fluctuation occurs in the domestic market, for example, competitors artificially reduced prices for similar products, this will negatively affect the process of accruing OS depreciation in a manufacturing company.
She will have to increase the time that was allotted for the transfer of the cost of old OF. That is why every manufacturing enterprise seeks to maximize the useful life of its assets through competent operation.
It is also worth noting that the percentage of depreciation deductions directly depends from the type of depreciation that has a direct impact on the operating fixed assets. In the event that the equipment will be subjected to several types of wear at once, then the business entity will have to use the maximum coefficient for it.
The definition of this concept is presented below.
land and other objects of nature management (water, subsoil and other natural resources);
· inventories, goods, capital construction in progress, securities, financial instruments of futures transactions (including forward, futures contracts, option contracts);
property of budgetary organizations, with the exception of property acquired in connection with the implementation of entrepreneurial activities and used to carry out such activities;
· the property of non-profit organizations received as earmarked receipts or acquired at the expense of earmarked receipts and used to carry out non-commercial activities;
· property acquired (created) with the use of budget funds for targeted financing, except for property received by the taxpayer during privatization;
· objects of external improvement (forest facilities, road facilities, the construction of which was carried out with the involvement of sources of budgetary or other similar targeted financing, specialized structures for navigation) and other similar objects;
· productive livestock, buffaloes, oxen, yaks, deer, other domesticated wild animals (with the exception of draft animals);
acquired publications (books, brochures and other similar objects), works of art. At the same time, the cost of acquired publications and other similar objects, with the exception of works of art, is included in other expenses related to production and sale in full at the time of the acquisition of these objects;
property received by the taxpayer in the framework of targeted financing;
· land reclamation and other agricultural facilities (including on-farm water pipelines, gas and electric networks) received by agricultural producers, built at the expense of budgets of all levels;
property received free of charge by state and municipal educational institutions, as well as non-state educational institutions that have licenses for the right to conduct educational activities, to conduct statutory activities;
fixed assets received by organizations that are part of the structure of the Russian Defense Sports and Technical Organization (ROSTO) (when they are transferred between two or more organizations that are part of the structure of ROSTO), used to train citizens in military specialties, military-patriotic education of youth , development of aviation, technical and military-applied sports in accordance with the legislation of the Russian Federation;
property received in the form of gratuitous assistance (assistance) in the manner established by the Federal Law of May 4, 1999 No. 95-FZ “On gratuitous assistance (assistance) of the Russian Federation and the introduction of amendments and additions to certain legislative acts of the Russian Federation on taxes and establishment of privileges on payments to state non-budgetary funds in connection with the implementation of gratuitous assistance (assistance) of the Russian Federation”;
· property in the form of fixed assets and intangible assets received free of charge in accordance with international treaties of the Russian Federation, as well as in accordance with the legislation of the Russian Federation by nuclear power plants to improve their safety, used for production purposes.
the first group - all non-durable property with a useful life of 1 to 2 years inclusive;
· the second group - property with a useful life of more than 2 years to 3 years inclusive;
· the third group - property with a useful life of more than 3 years to 5 years inclusive;
· fourth group - property with a useful life of more than 5 years up to 7 years inclusive;
· fifth group - property with a useful life of more than 7 years up to 10 years inclusive;
· sixth group - property with a useful life of more than 10 years to 15 years inclusive;
· seventh group - property with a useful life of more than 15 years to 20 years inclusive;
· eighth group - property with a useful life of over 20 years up to 25 years inclusive;
· ninth group - property with a useful life of more than 25 years to 30 years inclusive;
· tenth group - property with a useful life of over 30 years.
If the fixed asset is not named in any of the depreciation groups established by the Classification of fixed assets, then the taxpayer sets it on the basis of the manufacturer's recommendations or in accordance with the technical specifications. The use by the taxpayer, for the purpose of calculating depreciation, of the terms established independently, is not provided for by the legislation on taxes and fees.
Depreciation for fixed assets is calculated on the basis of the initial (residual) value of the useful life and the depreciation method chosen by the taxpayer from the two methods provided for by the Tax Code of the Russian Federation.
At the same time, for fixed assets belonging to the same depreciation group, both a different service life for each object and a depreciation method (linear or non-linear) can be established.
When using the cash method in accordance with the Tax Code of the Russian Federation, depreciation is accounted for as an expense in the amounts accrued for the reporting (tax) period. In this case, depreciation is allowed only for depreciable property paid by the taxpayer and used in production.
Depreciation on an object of depreciable property begins on the 1st day of the month following the month in which this object was put into operation, and terminates on the 1st day of the month following the month when the value of the object was fully written off or when this object withdrew from the depreciable property of the taxpayer for any reason.
The grounds for the disposal of fixed assets are the cases of their sale, liquidation, transfer to the authorized capital of other organizations, gratuitous transfer, transfer to conservation, modernization or reconstruction.
In accordance with the Tax Code of the Russian Federation, depreciation is not charged for fixed assets transferred by a taxpayer for free use, starting from the 1st day of the month following the month in which the said transfer took place.
The same procedure applies to fixed assets transferred by decision of the management of the organization for conservation for more than three months, as well as for fixed assets that are under the decision of the management of the organization for reconstruction and modernization for more than 12 months.
At the end of the contract for gratuitous use and the return of fixed assets to the taxpayer, as well as upon reactivation or completion of reconstruction, depreciation is accrued starting from the 1st day of the month following the month in which the return of fixed assets to the taxpayer, completion of reconstruction or reactivation of the fixed asset took place.
If an organization during any calendar month was established, liquidated, reorganized or otherwise transformed in such a way that, in accordance with the Tax Code of the Russian Federation, the tax period for it begins or ends before the end of the calendar month, then depreciation is charged taking into account the following features:
1) depreciation is not charged by the liquidated organization from the 1st day of the month in which the liquidation is completed, and by the reorganized organization - from the 1st day of the month in which the reorganization is completed in accordance with the established procedure;
2) depreciation is accrued by the organization being established, formed as a result of reorganization - from the 1st day of the month following the month in which its state registration was carried out.
The provisions of this paragraph do not apply to organizations that change their organizational and legal form.
Example.
In January 2004, the organization put into operation the fixed asset acquired in the same month. The useful life is set at 5 years (60 months). In March 2004, the fixed asset was transferred to another organization under a 5-month gratuitous use agreement. After the expiration of the contract in August 2004, the fixed asset will be returned to the owner.
Depreciation must begin on the 1st day of the month following the month in which the fixed asset object was put into operation, that is, from February 1, 2004
Depreciation is terminated from the 1st day of the month following the month in which the fixed asset object was transferred to another organization under a gratuitous use agreement, that is, from April 1, 2004.
Depreciation is resumed starting from the 1st day of the month following the month in which the fixed asset will be returned to the owner, that is, from September 1, 2004.
When an object is disposed of due to the expiration of its useful life, depreciation is terminated from the 1st day of the month following the month in which the fixed asset object was disposed of from the depreciable property, that is, from February 1, 2008.
Since the fixed asset object will be in gratuitous use for 5 months, and depreciation will not be charged on it, the full write-off of the cost will not occur, since the useful life of the fixed asset for the period of its being in gratuitous use does not increase.
Example.
In January 2004, the organization put into operation the fixed asset acquired in the same month. The useful life is set at 5 years (60 months). In March 2004, the fixed asset was put into conservation for a period of 5 months. After the end of the conservation period in September 2004, the fixed asset will be put back into operation.
In accordance with the Tax Code of the Russian Federation, fixed assets transferred by decision of the management of the organization for conservation for more than 3 months are excluded from the depreciable property.
When an item of fixed assets is reactivated, depreciation is accrued on it in the manner that was in effect until the moment of its conservation, and the useful life is extended for the period the item of fixed assets was on conservation.
Depreciation must be charged on the 1st day of the month following the month in which the fixed asset object was put into operation, that is, on February 1, 2004.
Depreciation is terminated from the 1st day of the month following the month in which the fixed asset, by decision of the management, was transferred for conservation, that is, from April 1, 2004.
After the reactivation of the fixed asset object, depreciation is resumed; in this example, this will happen from September 1, 2004.
When an object is disposed of due to the expiration of its useful life, depreciation is terminated from the 1st day of the month following the month in which the object of fixed assets was disposed of from the depreciable property. Since this object was mothballed for 5 months, its useful life will be increased by 5 months and depreciation will stop from July 1, 2008.
In accordance with the Tax Code of the Russian Federation, in order to calculate income tax, taxpayers can choose one of the methods for calculating depreciation:
Linear;
Nonlinear.
The depreciation method selected by the organization in relation to the depreciable property on the basis of the Tax Code of the Russian Federation cannot be changed during the entire period of depreciation for this object.
The straight-line method is a uniform write-off of the cost of depreciable property during its useful life, established by the organization when accepting the object for accounting.
When applying the straight-line method, the amount of depreciation accrued for one month in relation to an object of depreciable property is determined as the product of its initial (replacement) cost and the depreciation rate determined for this object.
At using the straight-line method, the depreciation rate for each item of depreciable property is determined by the formula:
K = (1/n) x 100%,
where K is the depreciation rate as a percentage of the original (replacement) cost of the depreciable property;
Example.
In January 2004, the organization put into operation an object of fixed assets acquired in the same month for 60,000 rubles (excluding VAT). The acquired item of fixed assets belongs to the fourth depreciation group and the organization has set the useful life equal to 6 years (72 months). The main tool is used in the business activities of the organization.
The monthly depreciation rate will be (1:72 months) x 100% = 1.39%.
The amount of monthly depreciation charges will be 834 rubles (60,000 rubles x 1.39%), thus, for the purpose of calculating income tax, the cost of production and sales will include the amount of depreciation for this fixed asset in the amount of 834 rubles.
When applying the non-linear method, the amount of depreciation accrued for one month in relation to an object of depreciable property is determined as the product of the residual value of an object of depreciable property and the depreciation rate determined for this object.
When using the non-linear method, the depreciation rate on depreciable property is determined by the formula:
K = (2/n) x 100%,
where K is the depreciation rate as a percentage of the residual value applied to this depreciable property;
n is the useful life of this depreciable property, expressed in months.
In this case, from the month following the month in which the depreciable property item reaches 20 percent of the original (replacement) value of this item, depreciation on it is calculated in the following order:
1) the residual value of the depreciable property for the purpose of depreciation is fixed as its base value for further calculations;
2) the amount of depreciation accrued for one month in respect of this item of depreciable property is determined by dividing the base cost of this item by the number of months remaining until the expiration of the useful life of this item.
Example.
In January 2004, the organization put into operation a fixed asset worth 20,000 rubles (excluding VAT). This item of fixed assets belongs to the second depreciation group, the organization has set a useful life of 2.5 years (30 months).
The monthly depreciation rate for this item of fixed assets, calculated on the basis of the useful life of the item, will be 6.67% (2 / 30 months) x 100%).
| Period | Calculation of the amount of depreciation, rubles | Residual value at the beginning of the next month, rubles |
| 2004 | ||
| 20,000 x 6.67% = 1334 | 20 000 – 1334 = 18 666 |
|
| 18,666 x 6.67% = 1245.02 | 18 666 – 1245,02 = 17 414,98 |
|
| 17,414.98 x 6.67% = 1161.58 | 17 414,98 – 1161,58 = 16 253,40 |
|
| 16,253.40 x 6.67% = 1084.10 rubles | 16 253,40 – 1084,10 = 15 169,30 |
|
| 15,169.30 x 6.67% = 1011.79 | 15169,30 – 1011,79 = 14 157,51 |
|
| 14,157.51 x 6.67% = 944.31 | 14 157,51 – 944,31 = 13 312,20 |
|
| 13,312.20 x 6.67% = 881.32 | 13 312,20 – 881,32 = 12 331,88 |
|
| September | 12,331.88 x 6.67% = 822.54 | 12 331,88 – 822,54 = 11 509,34 |
| 11,509.34 x 6.67% = 767.67 | 11 509,34 – 767,67 = 10 741,67 |
|
| 10,741.67 x 6.67% = 716.47 | 10 741,67 – 716,47 = 10 025,20 |
|
| 10,025.20 x 6.67% = 668.68 | 10 025,20 – 668,68 = 9 356,52 |
|
| 2005 year | ||
| 9,356.52 x 6.67% = 624.08 | 9 356,52 – 624,08 =8 732,44 |
|
| 8,732.44 x 6.67% = 582.45 | 8 732,44 – 582,45 = 8 149,99 |
|
| 8,149.99 x 6.67% = 544.17 | 8 149,99 – 544,17 = 7 605,82 |
|
| 7605.82 x 6.67% = 507.32 | 7 605,82 – 507,32 = 7 098,51 |
|
| 7,098.51 x 6.67% = 473.47 | 7 098,51 – 473,47 = 6 625,04 |
|
| 6,625.04 x 6.67% = 441.89 | 6 625,04 – 441,89 = 6 183,15 |
|
| 6,183.15 x 6.67% = 412.42 | 6 183,15 – 412,42 = 5 770,73 |
|
| 5,770.73 x 6.67% = 384.91 | 5 770,73 – 381,91 = 5 385,82 |
|
| September | 5,385.82 x 6.67% = 359.23 | 5 385,82 – 359,23 = 5 023,59 |
| 5,023.59 x 6.67% = 335.27 | 5 023,59 – 335,27 = 4 691,32 |
|
| 4,691.32 x 6.67% = 312.91 | 4 691,32 – 312,91 = 4 378,41 |
|
| 4,378.41 x 6.67% = 292.04 | 4 378,41 – 292,04 = 4 086,37 |
From the above calculation it can be seen that every month the amount of accrued depreciation decreases.
In December 2005, the residual value of the fixed asset will be 20% of its original cost (20,000 rubles x 20% = 4,000 rubles). 23 months have passed since the depreciation in this example. The remaining useful life of the object is 7 months.
The monthly amount of depreciation deductions until the end of the life of the facility will be 583.76 rubles.
With regard to fixed assets, taxpayers may apply special increasing and decreasing coefficients to the basic rate of depreciation, provided for by the Tax Code of the Russian Federation.
In accordance with the Tax Code of the Russian Federation, multiplying factors are provided for:
§ depreciable fixed assets used to work in an aggressive environment and (or) increased shifts. In this case, the taxpayer has the right to apply a special coefficient, but not higher than 2. An aggressive environment is understood as a combination of natural and (or) artificial factors, the influence of which causes increased wear (aging) of fixed assets during their operation. Also, the presence of fixed assets in contact with an explosive, flammable, toxic or other aggressive technological environment, which can serve as a cause (source) of initiating an emergency, is equated to work in an aggressive environment.
§ depreciable fixed assets that are the subject of a financial lease agreement (leasing agreement). In this case, the taxpayer for which this fixed asset must be accounted for in accordance with the terms of the financial lease agreement (leasing agreement) has the right to apply a special coefficient to the basic depreciation rate, but not higher than 3. These provisions do not apply to fixed assets related to the first, to the second and third depreciation groups, if depreciation for these fixed assets is calculated using a non-linear method. Taxpayers who transferred (received) fixed assets that are the subject of a leasing agreement concluded before January 1, 2002, are entitled to charge depreciation on this property using the methods and norms that existed at the time of transfer (receipt) of the property, as well as using a special coefficient not above 3.
§ taxpayers - agricultural organizations of an industrial type (poultry farms, livestock complexes, fur farms, greenhouse complexes), which are entitled to apply a special coefficient, but not higher than 2, to the basic depreciation rate, chosen independently, taking into account the provisions of the Tax Code of the Russian Federation, in relation to their own fixed assets.
Example.
In February 2004, the organization put into operation a fixed asset purchased in the same month for 236,000 rubles, including VAT of 36,000 rubles. This fixed asset belongs to the fourth depreciation group and the organization, when accepting an object for accounting, sets a useful life of 6 years (72 months). The fixed asset is used in the production process in conditions of increased shifts, in accordance with Decree No. 1072 « Depreciation rates for machinery and equipment are established on the basis of a two-shift operation mode (with the exception of equipment for continuous production, forging and pressing equipment weighing more than 100 tons, for which the rates are set based on a three-shift operation mode, and logging equipment, for which the norms set based on the mode of operation in one shift)”, and applies a special multiplier of 1.4. The organization calculates depreciation using the straight-line method.
The monthly depreciation rate of this fixed asset, calculated on the basis of the established useful life of the object and a special multiplying factor, will be 1.94% ((1 / 72 months) x 100% x 1.4).
The amount of monthly depreciation deductions taken into account when taxing profits will be equal to 3,880 rubles (200,000 rubles x 1.94% / 100%).
Depreciation at rates lower than those established by the Tax Code of the Russian Federation is allowed by decision of the head of the taxpayer organization. The decision on whether an organization will apply reduction factors when calculating depreciation rates should be fixed in the accounting policy of the organization.
The use of reduced depreciation rates is allowed only from the beginning of the tax period and throughout the entire tax period.
According to the Tax Code of the Russian Federation for cars and passenger minibuses, the initial cost of which, respectively, is more than 300 thousand rubles and 400 thousand rubles, the basic depreciation rate is applied with a special coefficient of 0.5.
Example.
In January 2004, the organization put into operation a passenger minibus, the initial cost of which is 470,000 rubles (excluding VAT). The minibus, in accordance with the Classification of Fixed Assets, belongs to the third depreciation group, the organization, when accepting the object for accounting, set the useful life equal to 3.5 years (42 months). Depreciation for income tax purposes is calculated using the straight-line method.
The established useful life is 42 months, the monthly depreciation rate, taking into account the reduction factor, will be equal to 1.19% ((1 / 42 months) x 100% x 0.5).
The amount of monthly depreciation deductions taken into account for income tax purposes will be 5,593 rubles (470,000 rubles x 1.19% / 100%).
The amount of depreciation accrued during the useful life of the fixed asset will be equal to 234,906 rubles, while its initial cost is 470,000 rubles.
From the above example, it can be seen that when using reducing factors and applying the straight-line depreciation method, the organization will not be able to fully write off the cost of this fixed asset to production costs or selling expenses.
Article 259 of the Tax Code of the Russian Federation provides that taxpayers using reduced depreciation rates do not recalculate the tax base for the amount of undercharged depreciation against the norms provided for by the Tax Code of the Russian Federation for tax purposes.
A slightly different situation develops when taxpayers apply the non-linear depreciation method when calculating depreciation. When using the non-linear method, the organization will be able to charge a larger amount of depreciation to expenses than when using the straight-line method.
Let's use the conditions of the previous example and calculate depreciation using a non-linear method.
On the basis of the Tax Code of the Russian Federation, the reduction factor is applied by organizations that have received or leased cars and passenger minibuses. The specified property is included in the corresponding depreciation group and the basic depreciation rate is applied to this property, taking into account the special coefficient applied by the taxpayer for this type of property.
If the parties under the leasing agreement provide for the use of a multiplying factor of no more than 3, then the factor applied to the basic depreciation rate will be calculated as the product of the established multiplying factor by 0.5.
For more information on the issues of accounting and taxation of transactions with fixed assets, you can find in the book of CJSC "BKR Intercom-Audit" "Fixed Assets".
