Wear can be both physical (loss of properties, quality of materials, etc.) and moral (obsolescence of equipment, input of other technologies, changing requirements, etc.). Wear of fixed assets of the enterprise is inevitably not only for their continued use, but even with the inactivity, as in this case, there is the influence of external factors such as air, humidity, etc. There is a third type of depreciation is economic, which appears due to the impact of external political, economic and other factors.
The calculation of the amount of wear is to determine depreciation for the period of service fixed assets. Depreciation is the cost of restoring the working condition of fixed assets, elimination of wear and tear. These contributions are budgeted in the cost of finished products to cover the cost of restoration of fixed assets. We are talking about physical deterioration, since it is disposable.
There are several methods of calculating the amount of wear, but of them there are two basic linear and nonlinear. According to the linear method the annual amount of depreciation is determined on the basis of original cost of fixed assets taking into account depreciation rates and useful lives, which is determined by the enterprise independently on the Classification of fixed assets.
Formula straight line depreciation method to calculate the annual amount of wear and tear:SI = (PS*)/100,where SI is the amount of wear and tear, PS – initial cost of fixed assets or one of their objects, is the depreciation rate.
Nonlinear method, in turn, has two subspecies: this declining balance method and deduct this cost. According to the method of declining balance, the amount of wear is determined based on the residual value of fixed assets at the beginning of the reporting period (year) and the depreciation rate:SI = Cost*(*)/100,where Cost – residual value of fixed assets at the beginning of the reporting period, the acceleration factor, which is adopted by each organization, but can not be more than 3.
The method of writing off of cost on the sum of the numbers of years of useful use of fixed assets is to determine the amount of depreciation at historical cost and the ratio of the number of remaining years and the total number of years of service are:SI = PS*Tot/(T*(T + 1)/2), gdest – the number of years remaining until the end of service life, T is the total number of years of useful life of fixed assets.
Most of the enterprises, namely about 70%, prefer to use the linear method in their calculations. It attracts with its simplicity and minimum of the input data, which are always in the balance sheet of the company.