Accounting treatment for the retirement of fixed assets.
1. Definitions. Scrapping of fixed assets means that fixed assets cannot be used or have no use value due to the expiration of their service life, technological updates, force majeure and other reasons, and enterprises need to carry out accounting treatment on these fixed assets to ensure the accurate reflection of the financial status of the enterprise.
Second, the processing process.
1.Write off the original value and accumulated depreciation of fixed assets.
When a fixed asset is scrapped, the enterprise needs to write off the original value of the fixed asset and the accumulated depreciation. There are two common approaches:
1) Double declining balance method: When calculating the depreciation amount of fixed assets, the double declining balance method is adopted, that is, the depreciation amount of each period is calculated based on the double value of the original value of fixed assets and multiplied by a decreasing fixed ratio (generally 5%). In the depreciation of fixed assets in the last two years, the straight-line method is used to calculate the depreciation amount.
2) Straight-line method: When calculating the depreciation amount of fixed assets, the straight-line method is adopted, that is, the original value of fixed assets is used as the base and multiplied by a fixed annual depreciation rate (generally 5%) to calculate the depreciation amount of each period.
2.Net profit or loss carried forward.
After the write-off of fixed assets, the enterprise needs to carry forward the net profit or loss. If there is a net loss due to the retirement of fixed assets, it is necessary to set up a detailed account of "Retirement of Fixed Assets" under the "Non-operating Expenses" account for accountingIf a net income is generated, it is necessary to set up a "Fixed Asset Scrapping" detailed account under the "Non-operating Income" account for accounting.
3. Precautions.
1.When disposing of the retirement of fixed assets, enterprises need to strictly abide by relevant laws, regulations and accounting standards to ensure the accuracy and legitimacy of the accounting treatment.
2.When deregistering fixed assets, it is necessary to ensure that the relevant procedures are complete, such as scrapping application, approval, asset appraisal, etc.
3.When carrying forward net profit or loss, it is necessary to carefully check the data to ensure the accuracy of accounting treatment. At the same time, for the net income or net loss generated, the enterprise needs to pay income tax in accordance with the provisions of the tax law.
Fourth, case analysis.
An enterprise has a machine and equipment that has been used for many years, but it cannot continue to be used due to technological updates and market changes, and it is decided to scrap it after evaluation. The original value of the equipment is 100,000 yuan, the cumulative depreciation is 80,000 yuan, and the estimated residual value is 20,000 yuan. Enterprises use the double declining balance method to calculate the depreciation amount, and carry out accounting treatment in accordance with relevant regulations. The details are as follows:
1.Write off the original value and accumulated depreciation of fixed assets.
Debit: Disposal of fixed assets 20,000 yuan (original value - accumulated depreciation).
Accumulated depreciation of 80,000 yuan (depreciation has been provided).
Credit: fixed assets 100,000 (original value).
2.Carried forward net profit or loss (assuming no residual value).
Borrow: Non-operating expenses - scrapping of fixed assets 20,000 yuan (net loss).
Credit: Disposal of fixed assets 20,000 (net loss).
3.Pay income tax (assuming no residual value).
Debit: Income tax expense 050,000 (20,000*25%)
Credit: Tax Payable - Income Tax Payable 050,000 (20,000*25%)
4.Carry forward income tax expense to current year's profit (assuming no residual value).
Borrow: 050,000 (income tax expense).
Credit: Income tax expense 050,000 (income tax expense).