According to the provisions of Article 13 of Circular 45/2013/TT-BTC, there are 3 methods of calculating depreciation of fixed assets: straight-line depreciation, adjusted decreasing balance depreciation and depreciation based on quantity and volume of products. In the following article, let’s learn more about these depreciation calculation methods with MISA MeInvoice .
Note: Before learning about methods of calculating fixed asset depreciation, you can learn some general
information about fixed assets in the article.
[Update] What is fixed asset ? Classification of fixed asset types
What is fixed asset depreciation? – 5 things to KNOW
Table of Contents Hide
1. 03 Fixed asset depreciation methods
1.1 Straight-line depreciation method
1.2 Adjusted declining balance depreciation method
1.3 Depreciation method based on quantity and volume of products
2. Frequently asked questions about depreciation of fixed assets
2.1 What are the principles of depreciation of fixed assets?
2.2 Can the depreciation period of fixed assets be changed?
Conclusion
1. 03 Fixed asset depreciation methods
Fixed asset depreciation method
1.1 Straight-line depreciation method
Pursuant to the provisions of Point a, Clause 2, Article 13 of Circular 45/2013/TT-BTC stipulates:
The straight-line depreciation method for fixed assets is a stable depreciation method over the useful life. Most business areas of the company can apply the straight-line depreciation method.
Fixed assets are depreciated using the straight-line depreciation method as follows:
Annual calculation:
Average annual depreciation rate of fixed assets = Original price of fixed assets : Depreciation period
Monthly calculation:
Average monthly depreciation rate = Annual depreciation amount : 12
1.2 Adjusted declining balance depreciation method
The depreciation rate of fixed assets using the adjusted decreasing balance method is determined as follows:
– Determine the depreciation period of fixed assets
Accelerated depreciation rate (%) = Fixed asset depreciation rate by straight-line method x adjustment factor
Fixed asset depreciation rate by straight-line method (%) = (1/Depreciation period of fixed asset) x 100
In the later years, when the annual depreciation rate determined by the declining balance method is equal to (or lower than) the average depreciation rate between the remaining value and the remaining years of use of the fixed asset, then from that year onwards the depreciation rate is calculated as the remaining value of the fixed asset divided by the remaining years of use of the fixed asset.
