Depreciation and depreciation of fixed assets

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In the financial calculations of any normally operating enterprise, depreciation must be present. There is a constant deterioration of equipment, buildings, automotive equipment, etc. How to compensate for the costs that will certainly arise during the restoration of fixed assets, where to get the money to carry out planned and other types of repairs? Here, depreciation deductions specially calculated for such cases come to our aid.

This type of deduction is very important for the operation of the enterprise and is included in the cost of products. As a result, the company receives a certain amount that can be spent on major or other types of repairs. All repairs of equipment are aimed at restoring or modernizing the main stock or some part of it. The depreciation of fixed assets expressed in monetary terms is called "depreciation". The fixed assets pledged during the design of the enterprise for fixed assets should be enough to purchase everything necessaryequipment and construction of buildings and communications.

The practice of depreciation charges is widespread all over the world. They are produced according to specially developed norms, which take into account the cost of the main fund and its monthly depreciation.

The established depreciation rates allow not only to take into account the cost of fixed assets being retired from operation, but also to correctly calculate the cost of production. The last parameter is very important for any enterprise, it is involved in many calculations.

Correctly calculated depreciation will ensure the restoration of fixed assets. They will also affect the profitability of products. Depreciation deductions continue to be deducted during the period of conservation of the equipment or when it stops due to lack of orders or for any other reason. Depreciation deductions are terminated during the period of reconstruction of fixed assets, with a complete stop of equipment.

The depreciation policy of any enterprise is very important for its normal operation in the market of manufactured products. It affects the depreciation charges carried out by the enterprise and affects the organization of equipment repairs. Moreover, it directly affects the competitiveness of products and the profitability of the entire enterprise. A depreciation policy aimed at lowering depreciation charges could lead to a complete h altenterprises. This will be due to a lack of funds for the repair of equipment. At the same time, their overestimation is also dangerous, since in this case the cost of manufactured products will increase and, as a result, its competitiveness in the market will change. This can lead to a loss of profit due to a decrease in the number of products sold, which will also negatively affect the operation of the entire enterprise.

In the financial documents of any enterprise there are also annual depreciation charges, which are calculated taking into account the maximum number of products that this equipment produced during the reporting period, and the cost of the equipment itself. This indicator helps to adjust monthly depreciation charges.