I believe that nowadays, everyone is no longer unfamiliar with fixed assets, and most of the bosses of many enterprises do not have such an understanding of their fixed assets. It comes down to the boss's lack of financial knowledge. So next we will explain the depreciation policy of fixed assets in 2021. Welcome to read!
Explanation of the depreciation policy for fixed assets in 2021
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The salvage rate of fixed assets stipulates:
1. Domestic-funded enterprises
Article 31 of the Interim Regulations and Detailed Implementing Rules of the People's Republic of China on Enterprise Income Tax: The proportion of residual value shall be within 5% of the original price and shall be determined by the enterprise itself. According to Article 2 of the Notice of the State Administration of Taxation on Doing a Good Job in the Follow-up Management of Cancelled Enterprise Income Tax Examination and Approval Projects (Guo Shui Fa [2003] No. 70), the proportion of residual value of fixed assets is uniformly 5%.
2. Foreign-funded enterprises
According to Article 33 of the Detailed Rules for the Implementation of the Income Tax Law on Foreign-Invested Enterprises and Foreign Enterprises, the residual value rate of fixed assets of foreign-funded enterprises is generally 10%.
Article 59 of the Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China (Decree No. 512 [2007] of the State Council) Deductions are granted for depreciation of fixed assets calculated according to the straight-line method.
An enterprise shall calculate depreciation from the month following the month in which the fixed assets are put into use;
An enterprise should reasonably determine the estimated net residual value of fixed assets based on the nature and use of fixed assets. Once the estimated net residual value of a fixed asset has been determined, it may not be changed.
Enterprise Income Tax Law of the People's Republic of China (Decree No. 63 [2007] of the President of the People's Republic of China)
If it is truly necessary to accelerate depreciation of an enterprise's fixed assets due to technological progress or other reasons, it may shorten the depreciation period or adopt the method of accelerated depreciation.
It can be seen that the new tax law no longer makes mandatory provisions on the ratio of the residual value rate of fixed assets, and entrusts the right to determine the ratio of the residual value rate of fixed assets to the enterprise, but emphasizes a rationality, requiring the production and operation of the enterprise and the nature and use of fixed assets, and reasonably determining the estimated net residual value of fixed assets.
Fixed assets refer to non-monetary assets held by enterprises for the production of goods, provision of services, leasing or operation and management, with a service life of more than one fiscal year and a value of a certain standard.
The depreciation period of fixed assets stipulates:
Unless otherwise stipulated by the competent departments of finance and taxation under the State Council, the minimum years for calculating depreciation of fixed assets are as follows:
(1) Houses and buildings, for 20 years;
(2) 10 years for aircraft, trains, ships, machines, machinery and other production equipment;
(3) Appliances, tools, furniture, etc. related to production and business activities, 5 years;
(4) Means of transport other than airplanes, trains and ships shall be 4 years;
(5) Electronic equipment, for 3 years.
Fixed assets shall be depreciated on a monthly basis. For fixed assets added in the current month, no depreciation is accrued in the current month, and depreciation is accrued from the following month; Depreciation is still accrued for fixed assets that are reduced in the current month, and depreciation is not accrued from the following month.
After the fixed assets are fully depreciated, regardless of whether they can continue to be used, depreciation is no longer accrued, and the fixed assets that are scrapped in advance are no longer depreciated.
Fixed assets that have reached the intended state of use but have not yet completed the final accounts shall be costed according to the estimated value and depreciation shall be accrued; The original provisional value will be adjusted according to the actual cost after the final account of completion is processed, but the depreciation amount that has been originally accrued does not need to be adjusted.
Fixed assets that have ceased to be used during the modernization process shall have their carrying amount transferred to the construction in progress and shall not be depreciated. After the modernization project reaches the intended usable state and is converted to a fixed asset, depreciation is calculated according to the redetermined depreciation method and the service life of the fixed asset.
Fixed assets are depreciated during regular major repairs.
Depreciation method of fixed assets:
The depreciation method of fixed assets refers to the specific calculation method used when allocating the total depreciation due during the various periods of use of fixed assets.
Specifically:
1. The average age method is characterized by the balanced allocation of the accrued depreciation of fixed assets to the expected service life of fixed assets, and the depreciation amount of each period calculated by this method is equal.
2. Workload method, that is, a method of calculating the accrued depreciation for each period based on the actual workload.
3. The double balance decreasing method should generally be amortized on average after deducting the net value of the net book value of the fixed asset after deducting the estimated net residual value within two years before the expiration of the service life of the fixed asset.
4. The sum of years method refers to the balance after subtracting the estimated net residual value of the original price of a fixed asset by multiplying it by a decrementing score year by year to calculate the depreciation amount for each year.
We've said this about the 2021 depreciation policy for fixed assets, and we hope it will help you. Thanks for reading!
Note: The content described in this article is for reference only, and everything is subject to the description of Fenghe Huibang Consultant.
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