Accelerated depreciation of fixed assets during leasing

Leasing, or long-term lease enjoyed in ancient times. The meaning of this operation was to use someone else's property (devices, tools, etc.) to obtain certain material benefits. For a temporary use of these funds, the owner owed a certain amount. Sometimes this amount of money could have a large size, so it was broken down into certain shares and paid throughout the life of the property or item. Today such deductions are called depreciation. There are several types of charges, but in combination with leasing use accelerated depreciation.

In modern conditions, under the definition of "accelerated depreciation for leasing" is understood a method that involves charging for depreciation of major assets in the first years of large amounts than in subsequent periods.

This method is used widely enough. It is used both for basic assets, whose work is aimed at increasing the level of output of goods, and in the mass replacement of worn out and outdated technology.

Most often, accelerated depreciation is necessary in order to update the fixed assets (equipment, machinery, etc.) in the shortest possible time. Usually the greatest efficiency from new machines and equipment is obtained only in the first years of use. It is for this period that the maximum charges are made. In the future, they are gradually reduced, increasing the cost of maintenance of the equipment and equipment used.

There are several ways in which accrued accelerated depreciation of fixed assets. This is a simple method of reducing the balance (the sum of years) and doubling the reduction of the balance. The essence of the first method is to determine the useful temporary operation, which is measured in years. Next, for each year, a certain amount of money is charged, and at the final stage, its specific size is calculated. Then, from this amount, the liquid value is subtracted, multiplying the difference by the useful life, after which the product is divided by the amount of years.

Accelerated depreciation, accrued by the method of double reduction of the balance, is calculated by multiplying the balance of the book value of the asset by a percentage constant coefficient, which is twice the proportional corresponding tariff. In this case, we can give the following example: with a useful life of five years, the tariff (proportional) from the amortized fixed asset will be 20 percent, its doubled rate will be 40 percent. Usually the last value is used to multiply the book value of the funds for the initial period of use.

The decision on whether accelerated depreciation should be applied for leasing (long-term lease) is accepted by the parties that entered this type of relationship - lessors and lessees. If an agreement has been reached between the parties on accelerated depreciation, the statutory depreciation charges are to be adjusted to a larger side using the acceleration factor .

When accruing depreciation through a linear method, the acceleration factor is not applied according to the accounting rules, however, accelerated depreciation in this case can also be used - this is not forbidden. This is possible due to the fact that under this approach the life of the leased property is decreasing, and the risk associated with the property tax is also reduced.

Amortization amounts accrued on leasing objects include the costs of selling and manufacturing services, goods, works that are accounted for in taxation.