How to calculate the depreciation factor

Enterprises carrying out commercial activity, constantly acquire fixed assets of different term usage. These include buildings and structures, machines, mechanisms and so on. But any equipment is subject to the moral and material obsolescence. To properly define it, enter the factor of wear and tear.

You will need

• Data on original cost of fixed assets, the rate of depreciation.

Instruction

1. First, you need to figure out what was the original cost of the purchased object of fixed assets. These data can be emphasized from primary documents. This invoice, receipts, invoices, and so on.
2. Next, you need to deal with the depreciation rate. This notion implies a pre-determined percentage that is deducted from the initial value of the object to recover its wear. For example, the cost of the car amounts to 800,000 rubles, and its useful life of 10 years. Let his price is 100%, then the depreciation rate in percentage would be 100%/10 years = 10% (in absolute terms 80000 rubles).
3. Now, having dealt with the necessary data, it is possible to calculate the coefficient of wear, which is defined as the ratio of the amount of depreciation for the period to the original cost of the asset. For clarity, you can continue to consider the example with the car. Let's say that he operated for 6 years. Means the amount of the depreciation during this period will be 6*80000 = 480000 RUB. the Coefficient of wear is:480000/800000 = 0.6