The calculation of linear depreciation


Calculate the annual depreciation of an asset is not very complex since, For best accountancy training Best school of accountancy In Lahore. It is sufficient to apply the following formula:
Annual amortization = depreciable base X depreciation rate
In this formula, the depreciable basis corresponds to the gross value (purchase value excluding VAT + ancillary costs) to which the residual value will be deducted .
The depreciation rate is obtained from the formula: 1 / duration of use . In France, the General Tax Code (CGI) determines the tax length of the depreciation of the various assets.
With all of this information, it is possible to create an amortization table including the depreciable base, the calculation of the annuity by taking into account the pro rata temporis, the accumulated depreciation and the net value of the asset.
Accounting for a straight-line depreciation
Once you have calculated the straight-line depreciation of an asset, it should not be omitted to be recorded in the company's accounts .
To do so, account 6811 - Depreciation and amortization on intangible and tangible fixed assets must be credited and at the same time debit account "28 - Amortization of fixed assets" .

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