Linear method of calculating depreciation - application rules

Technological progress and the linear method

The advantage of straight-line write-off of depreciation, which underlies the straight-line method, completely disappears if the company's assets are subject to rapid obsolescence.

These could be cars, machine tools, exclusive rights to computer programs and other non-financial assets, the use of which becomes ineffective due to the emergence of new, more advanced models and designs.

Real estate can also become obsolete if it no longer meets modern requirements for ergonomics, quality and volume of services provided.

If technological progress and changing requirements influence the rapid obsolescence of an asset, the feasibility of using non-linear methods should be considered when choosing a depreciation model.

In this case, straight-line depreciation does not provide a sufficient concentration of resources necessary to replace the asset. For those companies that plan to quickly update production assets, it is more profitable to use non-linear methods of calculating depreciation.

Used fixed assets

The straight-line method of calculating depreciation can also be used for property that has already been used. In this case, the useful life of a fixed asset will need to be determined as the difference between the useful life that was established by the previous owner and the number of years (or months) that the property was in use. In particular, such a rule has been adopted in relation to property that is contributed as authorized capital or in the order of succession during the reorganization or liquidation of organizations. Once the useful life is documented, depreciation can be calculated based on either the useful life or the remaining useful life.

Linear depreciation and its main features

The simplicity of this method should be considered one of its main advantages. A group of costs for fixed assets is simply written off while the entire service life lasts.

Write-off occurs in equal shares. The calculation system itself is elementary.

All you need is knowledge of information about how much the fixed assets originally cost. The depreciation rate is determined only once. To do this, we take the service life of a specific object as a basis.

Linear depreciation makes it easier for management to adhere to the so-called simplified approach to wear in the main production. Characteristic wear of fixed assets is equal in size.

Starting from the moment when the funds are put into operation, and ending with the moment when the entire cost is repaid. This does not take into account factors such as:

• Intensity of operation.
• Seasonality of work.

This approach will be most relevant in situations where the wear and tear of industrial buildings and other stationary objects is calculated. The impact of the external environment cannot be ignored, as well as the conditions under which the building is operated.

But in other conditions, it can be almost impossible to accurately determine the actual wear and tear of a particular building. Therefore, for many organizations, the most convenient method will be the one in which the write-off occurs in equal amounts that remain the same.

Conditions have a significant impact on the operational life when it comes to production equipment and other groups of fixed assets used in the enterprise. The performance of such objects decreases significantly over time.

Repair and maintenance costs are increasing . Write-offs for the reporting period are no longer possible because depreciation has increased. The method does not involve performing such actions.

When maintaining accounting records, it is necessary to reflect all the actions of the organization. This also applies to individual entrepreneurs’ contributions to extra-budgetary funds.

Management should take a closer look at nonlinear calculation methods if the company is interested in closing the cost of fixed assets as quickly as possible.

In this case, access to linear depreciation will open, deductions associated with products that were actually produced.

To what objects can the accrual method be applied?

There is a division into 10 groups for objects deductions for depreciation, which is determined by operating time. It is mandatory to use the linear method in the case of buildings and devices, transmission facilities when they represent one of the following categories:

• 10 group. With a service life of more than three decades .
• 9 group. 25-30 year period of operation.
• 8 group. 20-25 years is the maximum period for which the original properties are preserved.

The remaining objects allow the use of other existing techniques. This is recorded in the order, which is associated with the accounting policy.

To register an LLC, or any other organization, a legal address is required.

The use of the linear method is possible not only for new objects, but also for those that were previously in operation.

When is it necessary to use the straight-line depreciation method?

The taxpayer is obliged to apply the straight-line method of calculating depreciation to buildings, structures, transmission devices included in the eighth to tenth group (useful life 20-25, 25-30 and over 30 years).

Linear method of calculating depreciation of fixed assets

The straight-line depreciation method involves writing off the cost of a fixed asset in equal proportional installments over the entire period of its use.

What objects does it apply to?

Each organization has the right to independently choose the method of writing off depreciation charges.

Fixed assets are divided into 10 depreciation groups depending on the time period of their operation. The straight-line depreciation method must be applied to buildings, structures and transmission devices belonging to three groups:

• Group VII - objects with a service life of 20-25 years;
• Group XI – objects with a service life of 25-30 years;
• Group X – objects with a service life of more than 30 years.

For other objects, it is allowed to apply any method of depreciation at the organization’s discretion, as specified in the order on accounting policies.

The straight-line depreciation method can be used both for new property and for objects that were previously in use (operation).

IMPORTANT! Until recently, the chosen depreciation principle could not be changed to another throughout the entire period of deductions for this object. From January 1, 2014, an organization has the right to make a transition from a nonlinear to a linear method once every five years. For the reverse transition - from linear to nonlinear - there are no time restrictions; this can be done at any time, having previously made amendments to the regulations on the accounting policies of the enterprise.

Video - methods for calculating depreciation of fixed assets:

To determine the amount of monthly depreciation deductions using the linear method, it is necessary to know the primary cost of the object, its operational life and calculate the depreciation rate.

Primary cost of the object

The primary cost of the object is used as the basis for calculation, which is calculated by summing up all the costs of its purchase or construction. If the value of the property was revalued, then an indicator such as replacement cost is used for calculation.

Operational period

The operating period is established by studying the classification list of fixed assets, differentiating them into depreciation groups. If the object is not recorded in the list, then its service life is assigned by the organization depending on:

• predicted time of use;
• expected physical wear and tear;
• expected operating conditions.

Depreciation rate formula

The annual depreciation rate is expressed as a percentage of the primary (replacement) cost of the property and is calculated using the formula:

K = (1: n)* 100%,

where K is the annual depreciation rate;

n – service life in years.

If you need to find out the monthly depreciation rate, then the result is divided by 12 (the number of months in a year).

Formula for calculating depreciation

With the linear depreciation method, the calculation formula is:

A = C*K/12,

where A is the amount of monthly depreciation charges;

C – primary cost of property;

K – depreciation rate, calculated according to the formula in paragraph 3.

If you need to calculate the annual amount of depreciation charges, then you do not need to divide by 12 (the number of months in a year), or it is enough to divide the initial cost of the property by its service life.

Depreciation procedure

When calculating depreciation evenly, they are guided by the general rules for making depreciation deductions, namely:

• depreciation must be calculated from the 1st day of the month following the month in which this property was placed on the enterprise’s balance sheet;
• make depreciation charges regardless of financial results;
• make depreciation deductions every month and take them into account in the corresponding tax period;
• grounds for suspending depreciation deductions are considered to be the conservation of an object for a period of 3 months or its long-term repair (more than a year). Contributions resume immediately upon return to service;
• depreciation deductions cease on the 1st day of the month following the month of write-off due to wear and tear, withdrawal from the balance sheet or loss of ownership rights to the property.

The main advantages of the linear depreciation method:

• Easy to calculate. The calculation of the amount of deductions needs to be made only once at the beginning of the operation of the property. The amount received will be the same throughout the entire service life.
• Accurate recording of property write-offs. Depreciation deductions occur for each specific object (in contrast to non-linear methods, where depreciation is calculated on the residual value of all objects in the depreciation group).
• Uniform transfer of costs to production costs. With non-linear methods, depreciation charges in the initial period are greater than in the subsequent period (write-off occurs in descending order).

The linear method is convenient to use in cases where it is planned that the object will generate the same profit throughout the entire period of its use.

The main disadvantages of the linear method:

The method is not advisable to use for equipment subject to rapid obsolescence, since the proportional write-off of its cost does not ensure the proper concentration of resources necessary for its replacement.

Manufacturing equipment is characterized by a decrease in productivity as the number of years of operation increases. As a result, it will require additional costs for maintenance and repairs due to breakdowns and failures. Meanwhile, depreciation will be written off evenly, in the same amounts as at the beginning of operation, since the linear method does not provide otherwise.

For enterprises planning to quickly update production assets, it will be more convenient to use nonlinear methods.

The total amount of property tax over the entire life of the property to which the linear method is applied will be higher than with non-linear methods.

Depreciation rate

The depreciation rate shows what percentage of the cost of a fixed asset must be attributed to the cost of a product or service for a certain period.

Often this period is a month. Since depreciation is calculated monthly. However, for aggregated calculations, the annual depreciation rate can also be used.

The depreciation rate can be calculated using the formula:

where Nam is the depreciation rate.

Thus, if the useful life of the equipment is 5 years, then 1/60 of the cost of this equipment will be included in the monthly cost.

In other words, the monthly depreciation rate will be 1.67%, and the annual rate will be 20%.

Formula for calculating depreciation

With the linear depreciation method, the calculation formula is:

A = C*K/12,

where A is the amount of monthly depreciation charges;

C – primary cost of property;

K – depreciation rate, calculated according to the formula in paragraph 3.

If you need to calculate the annual amount of depreciation charges, then you do not need to divide by 12 (the number of months in a year), or it is enough to divide the initial cost of the property by its service life.

Straight-line depreciation method - formula

To establish the monthly amount of deductions for depreciable property, you must first determine the depreciation rate separately for each object. When linear depreciation is determined, the formula for calculating deductions for different months will be the same. In all cases, the basis is taken as a valuation equal to the value of the original price. It is broken down over all months of use of the asset using the estimated depreciation rate.

The formula for calculating depreciation using the linear method is as follows:

• Valuation of the object x Norm of deductions for the object

Calculation of the depreciation rate in a linear way is carried out by dividing the unit by the value of the operating period. The time period during which the asset will actually be used is shown in months in the calculations. The straight-line depreciation formula in tax accounting requires the mandatory presence of a coefficient in the form of a deduction rate (the indicator is first converted to a percentage).

The procedure for calculating depreciation using the straight-line method involves the start of deductions not from the date of acquisition of the asset, but from the next calendar month. To derive the annual depreciation value, you must use the rate for one year. The annual amount of depreciation can be determined using the linear method by dividing the unit by the operating period calculated in years.

How are calculations made in practice?

The primary cost of the object will be the basis for calculation. It is easy to determine - sum up all the costs of purchasing or constructing a particular object.

The replacement cost indicator is used if the value of the property has been revalued.

The classification list of fixed assets will help determine the operational period of the objects. It is here that they are divided into a certain number of groups.

But the organization itself can set operational deadlines if it is not on this list.

In this case, the calculation goes to:

• Operating conditions in the near future.
• Physical wear and tear, its estimated value.
• Predicted time of use.

For calculations, the formula is usually used:

K=(1:n)*100

N – designation of service life, in annual equivalent.

K – depreciation rate for the year.

The result obtained is divided by 12 if it is necessary to determine the monthly norm.

As for the linear method of calculating depreciation costs, in this case the formula looks slightly different:

A=C*K/12

K – Symbol of depreciation rate.

C – Data on the property, its original cost.

A – Depreciation group of deductions by month.

Dividing by 12 becomes unnecessary if depreciation deductions are calculated for the year.

An example of calculating depreciation using the straight-line method

A fixed asset worth 1,000,000 rubles was added to the company’s balance sheet in March. The accountant determined that its operational life, according to differentiation by depreciation groups, will be 10 years.

The procedure for calculating depreciation using the straight-line method for this example:

• We determine the annual depreciation rate: K = 1/10*100% = 10%.
• The monthly depreciation rate will be: 10%/12 = 0.83%.
• We determine the amount of monthly depreciation charges:

1,000,000*10%/12 = 8333 rubles.

• The amount of depreciation charges for the year of operation is:

1,000,000 rubles /10 years = 100,000 rubles.

Thus, using the straight-line method, depreciation must be calculated from April in the amount of 8,333 rubles per month.

Instructions for use

To calculate depreciation using the straight-line method in the online calculator, you must complete two steps.

Step 1. Enter the initial cost in the left field.

This parameter is calculated at the time the equipment is accepted for accounting and represents the sum of all acquisition costs. At its original cost, the asset is accounted for in account 01. This indicator is entered into the calculator in rubles.

Step 2. Indicate the useful life in months in the right field.

In tax accounting, SPI is set in accordance with the depreciation group that includes the fixed asset.

In accounting - you can install it yourself, focusing on the specifics of the application, operating conditions, and planned service life. It is possible to assume the same useful life period in accounting as in tax accounting.

In the form of the online calculator, SPI should be entered in months.

After filling out two fields, an automatic online calculation of depreciation, as well as related parameters, is carried out.

As a result of the calculation using the calculator, you can see:

• the amount of annual depreciation charges using the linear method of writing off fixed assets;
• the amount of monthly charges;
• annual and monthly depreciation rate.

Over the entire service life, depreciation is charged in equal amounts. Accrual postings can be viewed here.

Formulas for calculation using the straight-line method

The online calculator uses the following calculation formulas:

For accounting purposes:

Annual rate = 100% / SPI in years,

Monthly rate = Annual rate / 12 months,

Annual depreciation = Original cost * Annual percentage rate,

Monthly depreciation = Annual A. / 12 months[

For tax accounting purposes:

Monthly norm = 100% / SPI in months,

Monthly depreciation = Original cost * Monthly rate.

The procedure for applying the linear method.

Transition from non-linear to linear depreciation method

If a non-linear depreciation method was initially used, and later it was decided to use a linear one (the Tax Code allows changing depreciation methods, but not more than once every 5 years), then accountants may have a lot of questions in connection with such a transition.

1. What useful life is used in the calculation? When switching to the straight-line depreciation method, deductions are calculated based on the remaining useful life of the asset. This period must be determined on the 1st day of the month of the tax period, when the use of the linear method begins (paragraph 2, paragraph 4, article 322 of the Tax Code of the Russian Federation).
2. What value of the object should be taken as the basis for the new method of calculating depreciation? When switching to the linear depreciation method, you need to remember that part of the cost of the fixed asset has already been depreciated, so the calculation uses the residual value, which is also determined at the beginning of the tax period (clause 4 of Article 322 of the Tax Code of the Russian Federation). This is the position of officials (letter of the Federal Tax Service of Russia for Moscow dated December 1, 2009 No. 16-15/125942, letter of the Ministry of Finance of Russia dated January 28, 2010 No. 03-03-06/1/28).
3. What should you do if, when switching to the straight-line depreciation method, the period of actual operation exceeded the useful life of the object, but the cost of the fixed asset was not completely written off as expenses? In such a situation, it is necessary to charge depreciation of the object until its value is written off (letter of the Ministry of Finance of Russia dated July 21, 2014 No. 03-03-RZ/35549). In this case, the useful life is determined by the taxpayer in accordance with the provisions of paragraph. 2 clause 7 art. 258 of the Tax Code of the Russian Federation and taking into account safety requirements and other factors affecting the wear and tear of the object.

Formula for calculating depreciation rate using the linear method

As has already been described, the linear method of calculating depreciation rates is the most common and used in all areas and industries of commercial firms and enterprises.

It involves the gradual transfer of costs for the purchase of fixed assets to the selling price of goods produced or services provided. Calculation of depreciation is carried out from the moment an asset is put into operation until it is stopped and deregistered.

The straight-line method of calculating the depreciation rate involves writing off the cost of the used fixed asset in equal parts over the entire service life.

Since each company has the right to choose its own method of calculating depreciation, you need to know the legal restrictions in relation to certain types of fixed assets, to which the straight-line method of calculating the depreciation rate is mandatory. These are buildings, structures and devices with a service life:

• 20-25 years;
• 25-30 years;
• more than 30 years.

The linear method of calculating depreciation is used both for new objects and for those already in use. At the same time, you need to know that a company can switch from a non-linear method of calculating depreciation to a linear one once every five years, while reverse transitions are not regulated or limited.

How is the depreciation rate calculated using the straight-line method:

1. Determination of the primary cost of a fixed asset, which is defined as the amount of expenses for its purchase, construction or installation.

2. Useful period - determined on the basis of a classification list of fixed assets, dividing them by service life and depreciation rates. If the fixed asset is not on the list, then its characteristics are determined by the manufacturer’s technical documentation or the company’s accounting policies.

1. Formula for calculating depreciation rate using the linear method:

• Annual rate=(1/term of OS use)*100%;
• Monthly rate = Annual rate/12.

To calculate the absolute value of depreciation, the residual value of the fixed asset is multiplied by the previously obtained depreciation rate.

Basic rules for using the linear method :

• accruals are made from the first day of the month following the commissioning period;
• depreciation is accrued regardless of financial results;
• the basis for non-accrual is conservation for a period of 3 months or modernization and repairs for a period of at least a year.

We also recommend that you read the article Depreciation deductions: types, methods and methods of deductions, calculation formula. It will help you understand the material presented even more deeply.

In what cases is it used?

Linear calculation is used in relation to material and intangible objects. The duration of their operation or useful functioning should not be less than 1 year. The initial cost of property that is subject to depreciation is from 40 thousand rubles.

The presented method must be applied to buildings and structures if the service life exceeds 20 years. For objects with a different period, other options for calculating deductions may be used.

The following are not subject to depreciation:

• land;
• Natural resources;
• securities;
• capital construction projects (if it is not completed).

Such objects are not subject to wear and tear, so their cost cannot be included in the cost of manufactured products or services provided.

Advantages of the linear method

Each type of accrual is provided for specific conditions. Accrual of depreciation using the straight-line method is most appropriate when fixed assets are of a type for which the operating period is established regardless of its obsolescence, but according to time.

An important advantage of the linear type is its simplicity. Due to the ease and speed of calculations, it is used in most enterprises.

According to statistics, more than 70% of companies use the linear accrual method.

For some types of fixed assets, the linear method is mandatory. These are the company’s vehicles, its housing stock, buildings, etc.

For other types of fixed assets, you can select the type of depreciation charge. In most cases, linear is chosen because of its simplicity.

It must be remembered that the chosen method cannot be replaced by another over time.

What is this method?

The straight-line method is an accrual method in which the cost of fixed assets is transferred to finished products evenly throughout the entire period of operation .

The basis for such calculations is the initial cost. It is the sum of all costs spent on purchasing the asset, its delivery, installation and commissioning.

If the company revalued its property, then the replacement cost is used in the calculations.

Calculating the amount of depreciation is impossible without establishing the duration of the service life. It is recommended that its duration be determined in accordance with the state-developed classification of fixed assets. However, it is possible to independently forecast the period of operation of the property. To do this, the following factors are analyzed:

• physical wear and tear, which is associated with the mode and working conditions;
• possible period of use corresponding to the power of the equipment;
• regulations and other legal restrictions on the time of use of the asset.

The positive aspects of using this method include the following:

• simplicity of calculations, no need to do lengthy calculations and understand complex formulas;
• the value of the property is transferred evenly to the finished product;
• depreciation is calculated for each object;
• this method is used in tax accounting;
• no regular recalculations are required;
• suitable for calculating depreciation of real estate.

Along with the advantages, there are also a number of disadvantages due to the peculiarities of production:

• the deterioration of the original condition of the equipment over time is not taken into account;
• obsolescence is not taken into account;
• not suitable for large organizations that use equipment unevenly, that is, when some machines are idle;
• the load on the means of production is not taken into account.

The negative consequences of using the linear method are inferior to the advantages. That is why the vast majority of enterprises choose it for accounting.

Depreciation of fixed assets using the straight-line method

When using the linear method, the depreciation rate for each fixed asset item can be determined using the formula:

Depreciation rate = 100% / Useful life, months.

Monthly depreciation amount = Depreciation rate * Initial cost of fixed asset

Example. The organization purchased a fixed asset at a price of 50,000 rubles. (excluding VAT) with a useful life of three to four years. It was decided that depreciation would be charged over 40 months.

Depreciation rate: 100%: 40 months = 2.5%.

The monthly depreciation amount was: RUB 50,000. × 2.5% = 1250 rub.

The same result can be obtained using the formula =APL(50000;;40)

Accrual procedure

Deductions are made from the first day of the month following the date the asset is registered.

This process is completed only in two cases:

• after full transfer of cost to finished products;
• disposal of an object from the enterprise’s property as a result of sale, theft, breakdown and other cases.

In this case, depreciation charges cease to be accrued from the first day of the month following the date of exclusion of the asset from the organization’s property.

Accrual may be temporarily suspended if:

• the object is mothballed for a period of more than three months;
• the property has been under reconstruction or modernization for over a year.

Once the assets are returned to production, deductions should be resumed. The annual depreciation amount must be calculated taking into account the replacement cost.

Sometimes the assets of an enterprise include assets that were used in other organizations. Such objects include:

• contributions to the authorized capital;
• fixed assets acquired after reorganization;
• assets purchased are not new.

For such objects, the rules, calculation and procedure for calculating depreciation are exactly the same as for new ones. However, it is worth considering the length of their stay in another company. For current accounting, it is necessary to subtract the time of its actual operation from the useful life period. All accumulated depreciation for this object in another company is taken together with the book value of the asset.

Accounting for depreciation is carried out using contra account 02. In the course of its activities, the enterprise records with postings all cases of movement of the accumulated amount. For example:

All these entries are entered into the transaction journal based on the depreciation calculation sheet. The cost of fixed assets is subject to transfer to finished products on a monthly basis .

The amount of depreciation, additional accruals and markdowns as a result of the revision of the value of assets should be promptly entered into the inventory card of the object.

Depreciation in accounting

Types of depreciation in accounting

The purpose of depreciation in accounting is to transfer the cost of fixed assets to the cost of what the company produces. These can be goods or services.

The transfer process is carried out gradually, in equal or unequal shares for each year the item becomes obsolete.

The calculation is carried out over the useful life of the building, equipment, inventory, etc. There are special requirements for making depreciation deductions.

An accountant can only use those methods that are currently permitted in the Russian Federation. Today, four types of accrual are used.

This:

1. linear method;
2. a method when the cost is written off according to the sum of the numbers of years of the useful life period;
3. proportional method, when the write-off process is tied to one of the production indicators. For example, it could be a machine hour;
4. reduction of balance.

One of the most applicable in Russian accounting practice is the linear type. It has a number of advantages that make it the most profitable and simple.

Advantages and disadvantages of the linear method

The popularity of the linear method is due to its ease of use. Its essence is that every year an equal part of the cost of this type of fixed asset is depreciated. The depreciation amount will remain unchanged over the years.

In addition, the advantages of this method include the fact that, unlike the reducing balance method, it allows you to accurately write off the entire cost of equipment.

However, if an item of fixed assets is subject to obsolescence, then the use of the linear method does not accurately reflect the change in the value of the fixed asset. This is due to the fact that funds subject to obsolescence lose their value faster. In fact, a business may need to replace an OS, such as a computer, before it reaches the end of its useful life.

Thus, the linear method is advisable to use for those types of fixed assets where time, and not obsolescence (obsolescence), is the main factor limiting service life.

Advantages and disadvantages of the linear method of calculating depreciation rates

Despite its universal applicability, like any other financial or accounting tool, the straight-line method of calculating depreciation rates has its pros and cons.

Pros:

1. Ease of calculating absolute depreciation and its rate: Once made, the calculation will allow you to make further deductions until the end of the service life.
2. Absolute correctness of write-off procedures for each fixed asset item. While when using non-linear methods, depreciation can be charged on the total cost of all objects of one depreciation group.
3. Costs are reflected in the cost evenly, which allows you to regulate tax deductions. With non-linear calculations in the first periods of operation, depreciation deductions are higher, which leads to increased costs.

In general, the straight-line method of calculating depreciation rates is convenient to use when a fixed asset is operated evenly and makes the same contribution to cost throughout its life period.

Minuses:

1. If the fixed asset used has a short period of obsolescence and wear and tear, then using the linear method will not allow for its timely replacement - non-linear methods are preferable here, which give a high concentration of deductions in the initial periods of operation.
2. Equipment intensively used in production will require additional costs in the later stages of operation, which is associated with its obsolescence and wear; accordingly, with the linear method , all deductions are distributed evenly and will not be able to provide additional costs for repairs and modernization at later stages.

methods for calculating depreciation rates should be used , which will allow them to be replaced more quickly.

When using a fixed asset that has already been used, the linear method , as well as to new objects. The main condition is the correct calculation of the remaining service life, which is determined on the basis of the period established by the manufacturer or the former owner, without taking into account the actual time worked.

Thus, the linear method of calculating depreciation rates is advisable to use for fixed assets that have long service lives, a high threshold of obsolescence and a constant contribution to production processes and costs.

What numbers are involved in calculating depreciation using the straight-line method?

Linear is the method of calculating depreciation of an asset, which allows its value to be evenly transferred to the cost of finished products (work performed, services rendered).

To calculate the monthly depreciation amount using this method, you will need two figures:

• the initial cost of the asset (determined by the norms of clause 8 of PBU 6/01 “Accounting for fixed assets”, Article 257 of the Tax Code of the Russian Federation);
• useful life (established according to the rules of paragraph 4 of PBU 6/01, paragraph 1 of Article 258 of the Tax Code of the Russian Federation).

A distinctive feature of this method is equal monthly depreciation charges. That is, having calculated this indicator once, you will not need to make additional calculations if you do not plan to change the depreciation method.

Linear depreciation formula

For the linear depreciation method, we present formulas that allow us to determine the monthly amount of depreciation (AM) of fixed assets (fixed assets) and intangible assets (IMA) in accordance with the procedure provided for by PBU 6/01, PBU 14/2007 and Ch. 25 Tax Code of the Russian Federation:

How to calculate the depreciation rate using the linear method in tax accounting? This norm, as in accounting, depends on the useful life. Therefore, calculating the depreciation rate using the linear method according to the rules of Ch. 25 of the Tax Code of the Russian Federation looks like this: 1 / SPI * 100%, where SPI is the useful life in months.

Despite the fact that the formulas for calculating depreciation using the linear method in accounting and tax accounting are at first glance different, the procedure for calculating depreciation values ​​is essentially the same.

Therefore, to calculate linear depreciation, the formula for determining the monthly value (A) for simplification can be expressed as follows:

A = C / SPI

where C is the cost of the depreciable object, from which depreciation is calculated;

SPI – useful life of a depreciable object in months.

How to calculate depreciation of fixed assets using the straight-line method

To determine the amount of monthly depreciation charges using the straight-line method, it is necessary to have data on the initial cost of the object, establish the useful life and calculate the depreciation rate.

1. Initial cost of the object

The initial cost of an object is calculated by adding up all the costs of its acquisition or construction.

2. Useful life (operational period)

The useful life (operational period) is established by studying the list (classification) of fixed assets, in which fixed assets are divided into depreciation groups.

If the object is not indicated in the list, then its service life is assigned by the organization depending on:

• predicted time of use;
• expected physical wear and tear;
• expected operating conditions.

3. Formula for depreciation rate

The annual depreciation rate is calculated using the formula:

K = (1: n)* 100%,

where K is the annual depreciation rate;

n – service life in years.

If you need to find out the monthly depreciation rate, then the result is divided by 12 (the number of months in a year).

4. The formula for calculating depreciation using the linear method is as follows:

A = PS*K/12,

where A is the amount of monthly depreciation charges;

PS – primary cost of property;

K – depreciation rate, calculated according to the formula in paragraph 3.

If you need to calculate the annual amount of depreciation charges, then you do not need to divide by 12 (the number of months in a year), or it is enough to divide the initial cost of the property by its service life.

Based on these formulas, it becomes clear that the main difference of this method is the uniform transfer of the value of property to the company’s costs.

Thus, it is advisable to use the linear method of calculating depreciation if economic activity is stable, brings uniform profit and does not require rapid write-off of fixed assets.

Linear calculation is not suitable for calculating wear on quickly worn-out objects, with high intensity of production processes, as well as with premature obsolescence of property.

If new production is being developed, it is recommended to slow down the write-off of wear and tear; and in cases where the organization does not lack cash and can promptly update obsolete assets, accelerated depreciation with subsequent replacement of written-off equipment, machinery, tools, etc. would be optimal.

Example. Straight-line depreciation method

The organization purchased passenger vehicles for RUB 400,000. excluding VAT.

According to the classification rules, the car is included in 3 gr.

The useful life is set at 48 months.

To calculate monthly/annual depreciation amounts, you need to determine the annual depreciation rate and then the depreciation amount.

Annual depreciation rate = 1/4 = 25%;

monthly depreciation rate using the straight-line method, expressed as a percentage = 1/48 = 2.083%.

Monthly depreciation = 400,000 rubles. x 2.083% = 8332 rub.

Annual depreciation = 400,000 rubles. x 25% = 100,000 rub.

If the initial cost of the fixed asset and the useful life in tax accounting are established similar, the organization will recognize a monthly expense in the same amount when calculating the income tax base.

How to calculate depreciation using the linear method: basic indicators

Depreciation deductions must be regular. The cessation of depreciation occurs after the removal of an individual asset from the balance sheet, and its temporary suspension is allowed when an object is transferred to the mothballed group.

For calculations, you need to know the size of the following indicators:

1. Initial assessment of the object in question. It consists of a set of costs associated with the acquisition or creation of an asset. In the case of a revaluation, the replacement cost is taken as the basis.
2. Useful life. Accrual of depreciation using the straight-line method (an example may apply to any non-current asset) is impossible if the period of use is not defined. Its value is important for identifying the depreciation group and deducing the deduction rate (we wrote about how to determine this period here).

When calculating linear depreciation, the formula takes into account the time period during which the object will actually be listed on the enterprise’s balance sheet and continue to be used. If there has been a transition to a linear method from a non-linear method, then the period of use of the asset used in the calculations is determined by the remaining months of expected operation. Calculation of depreciation charges using the straight-line method in this case will be based not on the initial valuation, but on the value of the residual value.

Term of use

The indicator is determined based on the characteristics and purpose of the object. For these purposes, a classification containing a list of OS types can be used. There they are divided into categories depending on their useful life (USL).

In many cases, objects do not meet the criteria presented in the classifier. In this case, the calculations use the predicted service life, which is determined taking into account the conditions of use and the expected wear rate.

How to calculate depreciation using the straight-line method?

To calculate depreciation of a fixed asset, you need to know the useful life of the property. It can be determined by studying the depreciation groups of fixed assets or you can set the useful life yourself (if the specific property is not in the depreciation groups). The useful life is determined depending on the expected period of use, physical wear and tear and operating conditions of the equipment.

Let's perform linear depreciation using the example of a machine tool. Let's assume that its cost is 250,000 rubles. According to the classification of fixed assets, this machine belongs to the third depreciation group, and the useful life of such property is from three to five years. The organization has established a useful life of five years for a particular machine. This means that the annual depreciation rate will be 20% (100% / 5). It follows from this that the amount of depreciation for the year will be: 250,000 x 20%/100% = 50,000 rubles.

Accrual stages

The depreciation process must be carried out in accordance with established rules and requirements. They apply to all methods, including linear.

Basic Rules:

1. Depreciation charges are introduced from the month following the date of commissioning and putting the object on the balance sheet.
2. Calculated monthly deductions are made regardless of profit or other financial results.
3. Deductions are subject to accounting in the corresponding tax period.
4. If the facility is not in use for more than 3 months or is under repair for more than 1 year, deductions are suspended.
5. If property rights are lost, written off due to wear and tear, or completely removed from the balance sheet, depreciation will stop accruing from the next month.

It must be taken into account that the linear calculation is carried out for each OS object separately. At the same time, the initial (or replacement) cost of the object is a constant factor.

Therefore, having calculated the annual and monthly depreciation rates, these indicators do not change until decommissioning.

Calculation formula

Using the linear method, depreciation is calculated for each fixed asset item (clause 2 of Article 259 of the Tax Code of the Russian Federation).

When using the linear method, determine the depreciation rate for each fixed asset item using the formula:

Then calculate the monthly depreciation amount:

Such rules for calculating depreciation using the straight-line method are established by paragraph 2 of Article 259.1 of the Tax Code of the Russian Federation.

Replacement cost (taking into account additional valuation or depreciation) should be applied only to fixed assets registered before January 1, 2002. Starting from this date, the results of revaluations do not affect the initial cost of fixed assets in tax accounting. Determine the replacement cost according to the rules of paragraph 5 of paragraph 1 of Article 257 of the Tax Code of the Russian Federation.

An example of calculating depreciation of a fixed asset using the straight-line method in tax accounting

The organization purchased a fixed asset - a laptop at a price of 110,000 rubles. (without VAT). The accountant determined that, in accordance with the Classification approved by Decree of the Government of the Russian Federation of January 1, 2002 No. 1, the laptop belongs to the second group (useful life from two to three years). The organization decided that the costs of this fixed asset will be written off through depreciation over 25 months.

According to the accounting policy, for tax purposes, depreciation on computer equipment is calculated using the straight-line method. Bonus depreciation does not apply.

The organization's accountant calculated the depreciation rate as follows: 1:25 months. × 100% = 4%.

The monthly depreciation amount was: RUB 110,000. × 4% = 4400 rub.

Versatility and computational simplicity are not the only advantages of the method

The linear method has two main advantages:

• universality - the absence of differences between the algorithms for accounting and tax accounting and calculation of depreciation, which eliminates the need to reflect differences according to PBU 18/02 “Accounting for calculations of corporate income tax”;
• simplicity of calculation - when choosing the linear method of calculating depreciation, complex and regular calculations of depreciation are not needed; a simple formula is used when putting the asset into operation.

In addition, two more features of the method can be mentioned that distinguish it from nonlinear algorithms for calculating depreciation:

1. Uniform inclusion of depreciation in costs. A uniform write-off of depreciation will be an advantage of the linear method if it is more profitable and convenient for the company to transfer costs in the amount of depreciation to the cost evenly. For example, when putting an object into operation, it is planned that it will generate the same profit throughout the entire period of use. If the greatest profit is expected to be received in the first months of operation of the asset and there is an interest in writing off the largest amounts of depreciation during this period, a non-linear accrual method should be chosen.
2. Accounting accuracy. Unlike non-linear methods, where depreciation is calculated for a group of objects in a depreciation group, the linear method allows you to track the amount of accumulated depreciation and the residual value for each specific object. To do this, it is enough to build competent analytical accounting for accounts 01 “Fixed assets” and 02 “Depreciation of fixed assets”.

Depreciation of fixed assets using the non-linear method

Since 2009, using the non-linear method, depreciation is accrued not for each fixed asset item, but as a whole for depreciation groups, the composition of which is determined by the organization.

1. Total balance of the depreciation group (subgroup)

2. Depreciation rate

The depreciation rates that are applied under the non-linear method are defined in paragraph 5 of Article 259.2 of the Tax Code of the Russian Federation. For each depreciation group, fixed depreciation rates are established, which do not depend on the useful life of fixed assets (unlike the straight-line method).

The monthly depreciation amount is calculated using the formula:

Monthly depreciation amount = Total balance of the depreciation group on the 1st day of the month * Depreciation rate for the corresponding depreciation group

In essence, the calculation algorithm of the nonlinear method corresponds to the Reducing Balance method. The difference is that in the Declining Balance method, the monthly depreciation amount is determined by 1/12 of the Annual Depreciation Amount and does not change during the year.

Example1 from the website www.glavbukh.ru ]]> In January, the organization purchased five laptops. The cost of one laptop is 45,000 rubles. (without VAT). The laptop belongs to the second depreciation group (useful life from two to three years). The accounting policy for tax purposes determines that for fixed assets included in the second depreciation group, depreciation is calculated using a non-linear method. As of January 1, the organization did not have fixed assets included in the second depreciation group. Therefore, the total balance of this depreciation group on January 1 is zero. Laptops were put into operation in January. As of February 1, the total balance of the second depreciation group amounted to 225,000 rubles. (RUB 45,000 × 5 pcs.). The depreciation rate for the second depreciation group is 8.8 percent. The amount of accrued depreciation for February amounted to 19,800 rubles. (RUB 225,000 × 8.8%). In February, the organization purchased another laptop worth 50,000 rubles. (without VAT) and put it into operation in the same month. The total balance of the second depreciation group as of March 1 is equal to: 225,000 rubles. + 50,000 rub. – 19,800 rub. = 255,200 rub.

The amount of accrued depreciation for March was: RUB 255,200. × 8.8% = 22,458 rub.

If the total balance of a depreciation group becomes less than 20,000 rubles, in the month following the month when the specified value was reached, the taxpayer has the right to liquidate the specified group, and the value of the total balance is attributed to non-operating expenses of the current period (clause 12 of Article 259.2) .

Example2 from the site ]]> www.glavbukh.ru ]]> In January, the organization purchased a fixed asset - a laptop at a price of 55,000 rubles. (without VAT). The laptop was put into operation that same month. The accountant determined that in accordance with ]]> Classification ]]> , approved ]]> by Decree of the Government of the Russian Federation dated January 1, 2002 No. 1 ]]> , the laptop belongs to the second depreciation group (useful life from two to three years) . The useful life of the laptop is 36 months. There are no other fixed assets included in this depreciation group in the organization (see example file, sheet Nonlinear). According to the accounting policy, for tax purposes, depreciation on computer equipment is calculated using a non-linear method. The monthly depreciation rate for fixed assets included in the second depreciation group is 8.8 percent (clause 5 of Article 259.2 of the Tax Code of the Russian Federation). Every month, the accountant determined the total balance of the depreciation group and the amount of depreciation for this group:

Let us recall that for each depreciation group fixed depreciation rates are established, which do not depend on the useful life of fixed assets. Because Since MS EXCEL functions do not specify the depreciation rate, but rather the terms of use and acceleration coefficients, the functions cannot be used for calculations using the nonlinear method.

Postings for calculating depreciation using the straight-line method

When calculating depreciation, standard entries should be made monthly depending on where the fixed asset or intangible asset is used. The accounts used depend not only on the type of depreciable property (for loan 02 - for fixed assets, and 05 - intangible assets), but also on the type of its use. For example, depreciation of industrial objects is reflected, as a rule, in the debit of account 20, and trade organizations usually accrue depreciation in the debit of account 44. The attribution of depreciation to expenses in accounting is reflected by the following entries:

• Debit of account 20 Credit of account 02 - reflects the write-off of depreciation of the object for the main production.
• Debit of account 23 Credit of account 02 - reflects the write-off of depreciation of an auxiliary production facility.
• Debit of account 25 Credit of account 02 - reflects the write-off of depreciation of an object for general production purposes.
• Debit of account 26 Credit of account 02 - reflects the write-off of depreciation of a general purpose object.
• Debit of account 44 Credit of account 02 - reflects the write-off of depreciation of the object of trading companies.
• Debit of account 91 Credit of account 02 - reflects the write-off of depreciation for an object leased.
• Debit of account 20 (23, 25, 26, 44) Credit of account 05 – the write-off of depreciation for intangible assets is reflected.

Calculation of depreciation using the linear method and its features

Due to its simplicity, the linear method is the most widely used in practice. Contents: 1. Linear method of calculating depreciation of fixed assets 2. Example of calculating depreciation using the linear method 3.

Depreciation of used property 4. Conclusions Linear method of calculating depreciation of fixed assets The linear method of depreciation implies writing off the cost of a fixed asset in equal proportional parts throughout the entire period of its use. To which objects does it apply? Each organization has the right to independently choose the method of writing off depreciation charges.

Fixed assets are divided into 10 depreciation groups depending on the time period of their operation.

The straight-line depreciation method must be applied to buildings, structures and transmission devices belonging to three groups: Group VII – objects with a service life of 20-25 years;

Linear method of calculating depreciation of fixed assets (example, formula)

The depreciation rate for each fixed asset item is determined based on its useful life in months and is calculated using the formula: k = (1 / n) × 100% where n is the number of months of useful use of the fixed asset item.

This indicator is established on the basis of the Classification of fixed assets included in depreciation groups, approved by Decree of the Government of the Russian Federation dated January 1, 2002 No. 1 (hereinafter referred to as the Classification of fixed assets). Uniform attribution to expenses of the cost of depreciable fixed assets is the main convenience of the linear method.

Let us explain with a specific example how the linear depreciation method is used in practice. On March 18, 2018, Gamma LLC purchased a woodworking machine for furniture production and registered it as a fixed asset at an initial cost of RUB 180,000.00. The useful life of the machine was set at 72 months, because

How to work with property that has been used?

Organizations often operate objects that have already been used . Among them:

• Fixed assets received by an enterprise through succession when a legal entity was reorganized.
• Property received as a contribution to the authorized capital.
• Objects whose condition was not new already during the acquisition process

For such objects, depreciation is calculated in exactly the same way as for fixed assets. The only difference is that the service life is calculated slightly differently.

To determine it, we subtract from the period established by the former owners the time during which the equipment was actually used.

The main thing is to remember that the results of financial activities should not be affected by the absence or presence of these deductions at a particular enterprise. They are necessarily included in expenses for the tax period to which they relate.

It is acceptable to use non-linear methods of depreciation calculations, but it is the linear method that will be convenient, for example, for buildings or structures. And for other objects that are not directly used in production processes.

Methods for calculating depreciation of fixed assets:

Straight-line depreciation method

The method for calculating depreciation amounts must be fixed in the company’s working accounting policy. At the same time, you need to remember that for property (structures, buildings, intangible assets, transmission devices) it is allowed to choose only the straight-line depreciation method - the service life of the asset does not matter.

Note! The method established by the company for calculating depreciation according to NU can be changed, but only from the beginning of the next tax year. In this case, you can change to the straight-line depreciation method once every 5 years (p.

1 tbsp. 259). Depreciation is calculated from the 1st day of the month during the period of putting the object into operation, including fixed assets that require the state procedure. registration of rights (clause 4 of article 259).

If there has been a complete write-off of an asset or a disposal has occurred for various reasons, the accrual of depreciation amounts ends on the 1st day of the month following the month of disposal (clause

5 tbsp. 259.1). The linear method of calculating depreciation in accounting is regulated by clause.

Accounting for depreciation of fixed assets

Depreciation is a monetary unit of wear and tear. That is, this is part of the cost of an asset, which is included monthly in the cost of products, services, and goods.

Through depreciation, there is a gradual transfer of the value of a fixed asset, at which it is listed in accounting, to products and goods.

Ultimately, the money spent on the acquisition of operating systems is returned to the company after receiving payment from buyers and clients for the purchased values.

This process is gradual and continues throughout the entire useful life. To account for it, the accountant makes monthly entries in specially designated accounting accounts.

As long as the fixed asset is listed on the balance sheet of the enterprise, the accountant must make monthly depreciation deductions. This procedure is carried out until complete wear and tear, write-off due to unsuitability, breakdown or transfer to other persons.

The process of depreciation accumulation is suspended only in two cases:

1. The OS is under conservation, provided that its duration exceeds 3 months.
2. Restoration, modernization, reconstruction of an object, if this process takes more than a year.

If a decision is made to sell an object or write it off, the accountant determines the residual value of the asset. To do this, the depreciation accrued for the entire period is written off by posting to account 01, where the residual parameter is determined.

If during the operation of equipment or another object the initial cost changes due to revaluation, then depreciation accumulations are also recalculated and the necessary entries are made.

Thus, the accountant is faced with the need to reflect entries for accounting for depreciation of fixed assets in the following cases:

• making monthly depreciation payments;
• changes in accumulated deductions due to revaluation of the value of fixed assets (may either increase or decrease);
• write-off of a depreciable object as unnecessary (physical or moral wear and tear, breakdown, irreparable defects);
• disposal of fixed assets to third parties (sale, donation, contribution to the authorized capital of other enterprises).

How is the excess accrued amount for the previous period reflected?

If depreciation for the previous period was accrued incorrectly in an excessive amount, then the errors must be corrected. It is important in what period they were admitted - the current year or the past.

The mechanism for correcting accounting errors is prescribed in PBU 22/2010.

If the amount of depreciation has been excessively accrued, then it is necessary to reverse the excess accruals using red entries for those accounts for which incorrect entries were made.

If an error was made in the current year

Depreciation is corrected until accounts 20 or 44 are closed (depending on where savings are taken into account):

Posting reversal: Dt 20 (44) Kt 02 - for the amount of excess depreciation.

Correction after closing account 20 (or 44):

You also need to adjust account 90 to reflect expenses that are not accepted for tax accounting.

Posting reversal: Dt 90.3 Kt 20 for the overcharged amount.

If the excess accrual occurred in the year ended

Adjustments must be made to account 91 - posting: Dt 02 Kt 91.

Features of the linear method

If an organization has chosen the straight-line method for calculating depreciation on fixed assets, this means that throughout the entire useful life of the property, which the organization establishes when registering a fixed asset, the cost will be written off evenly. The amount of depreciation accrued per month in this case will be determined as the product of the original cost of the property and the depreciation rate that is determined for a specific object.

The depreciation rate is determined by the following formula: K= (1/n) x 100%

Here K is the depreciation rate, expressed as a percentage of the original cost of the property, and n is the useful life of the property, which is expressed in months.

The amount of depreciation accrued per month is: A = C x K

Here A is the amount of depreciation per month, C is the initial cost of the fixed asset, K is the depreciation rate in%.

Linear depreciation implies that the physical depreciation of the property occurs evenly and equally throughout the entire period of use. Of course, this primarily applies to stationary structures, since when operating equipment, the time of use and conditions of use are of great importance. For example, obsolescence cannot occur at the same rate throughout the entire period of use of a fixed asset. But if we take into account that there may not be accurate information about the rate of depreciation of a particular property, then the linear method, characterized by uniform write-off, will be the simplest for calculations.

Linear and nonlinear methods in NU

The legally established procedure does not allow the cost of fixed assets and intangible assets to be immediately written off as expenses. In tax and accounting, depreciation serves this purpose. All depreciable objects are divided into groups (Article 258 of the Tax Code of the Russian Federation) according to their useful life (SPI). An important concept is also the depreciation rate (RA). Uniform repayment of the cost of fixed assets and intangible assets in the form of depreciation deductions in tax accounting is carried out in two ways: linear and non-linear.

Linear method formula: Am = Ps / SPI / 12, where Am is the amount of monthly depreciation, Ps is the initial cost of the object (instead there may be a replacement cost if it has been revalued), SPI is taken in years.

Art. 259-1 of the Tax Code of the Russian Federation describes the same method in a slightly different way. First, the monthly depreciation rate is determined as a percentage of Ps: K = 1 / SPI * 100%. SPI is taken in months. Next Am = Ps * K.

Example 1. The cost of the purchased milling machine is RUB 1,680,000. It belongs to the fifth depreciation group and can be used from 7 to 10 years. The SPI is set at 8 years 8*12=96 months. Calculation: 1/96*100% = 1.04167%, Am = 1680000*1.04167% = 17500 rub. Or 1,680,000/8/12 = 17,500 rubles. per month.

For your information! In this way, depreciation is calculated for each fixed asset or intangible asset. In practice it is used most often.

Nonlinear is another method permitted by the Tax Code of the Russian Federation. It is applied to a group of objects. It is not the initial value that plays a role, but their residual value. For each depreciation group, the balance of the value of objects is determined in total, and the calculation is made on every 1st day of the month. It will be reduced by the amount of group depreciation charges. Depreciation rates for this method are regulated and specified in Art. 259.2 clause 5 of the Tax Code of the Russian Federation.

Formula of the nonlinear method: Am = Bg * (K / 100). Here K is the monthly depreciation rate determined by the article, Bg is the balance for the group of objects.

Example 2. The initial cost of three milling machines is RUB 5,100,000. The norm for the fifth group is 2.7. In the first month, Am = 5,100,000*(2.7/100) = 137,700. 5,100,000 – 137,700 = 4,962,300. In the second month, Am = 4,962,300*(2.7/100) = 133,982.10 and so on.

Attention! Some objects from 8-10 depreciation groups can be depreciated for NC purposes only in a linear way (clause 3 of Article 259 of the Tax Code of the Russian Federation).

Calculation of depreciation using the straight-line method

The method is called “linear”, since the cost of the fixed asset with its help decreases evenly. That is, it is divided into equal shares. What is the following formula used for:

A=(C×H)/100

“A” refers to deductions that will be made every year.

C is the cost of the item or object with which it was credited to the enterprise’s balance sheet.

H is the standard designation for the deduction rate.

For example, if a company purchased a machine that costs 50,000 rubles. With a service life of 10 years, 100,000/10 will be deducted. We receive 5,000 rubles per month.

As a result of depreciation charges at the end of the tenth year of service, the residual value of the machine will be 0 rubles. This does not mean that the machine will completely depreciate and can be thrown away. It can serve properly for many years to come, fulfilling its original functions.

But in the documents it means that the costs of purchasing equipment are fully reimbursed. At the same time, the machine has a real value at which it can be sold, exchanged, etc., if necessary.