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Anglicky v odbornch pedmtech"Support of teaching technical subjects in EnglishTutorial: Business Academy

Topic: Fixed assets depreciation ( 2nd part)

Prepared by: Ing. Jana ustrov

Projekt Anglicky v odbornch pedmtech, CZ.1.07/1.3.09/04.0002je spolufinancovn Evropskm socilnm fondem a sttnm rozpotem esk republiky.

They objectively reflect the actual rate of property depreciationAccounting Act sets companies to have the depreciation schedule in which calculation of depreciation will be determinedDepreciation period is not specified, but it should not be less than 1 yearAccounting depreciation is calculated to the nearest month for more accurate business resultsAccounting depreciation must be accounted to the latest balancing account

Accounting depreciation

Accrued depreciation

Depreciation amounts are calculated according to the estimated serviceable and useful life of the assetIt is usually determined for a month

Example: The company bought a copy machine on 30.9.2011 for CZK 144.000,-, usable life was set for 3 years (36 months). Depreciation has started since 1.10.2011.

Calculation: monthly depreciation: 144 000/36 = 4 000,--accounting depreciation year 2011: 3 x 4 000 = 12 000,--

The most common methods of calculation

Output depreciationThe calculation is based on the planned output e.g. Mileage, number of manufactured products, planned capacity provided by the manufacturer

Example: The company bought a passenger car for CZK 600.000,-. Depreciation basis is estimated number of kilometres for its useful life that is CZK 150.000,-. In the first year the car was driven 15.000km.

Calculation:Depreciation for 1 km: 600 000 / 150 000 = CZK 4,-Accounting depreciation in the first year: 15 000 x 4 = 60 000,-

They are accurate to the monthDepreciation period depends on whether the company has the fixed-term or unspecific-term assets.Fixed-time property: monthly depreciation = input price/negotiated periodUnspecific-time property:monthly depreciation= input price/ periods according to the monthsTax depreciation of intangible assets

Audio visuals...................................18 monthsSoftware, research & development...36 monthsOrganization costs.60 monthsOther intangible assets....................72 months

Depreciation starts on the first day of the following month after the asset is put into use.The period of depreciation of intangible assets according to he Law on Income Tax Act (ITA)

The company bought software on 5.4.2011 for CZK 72.000,-. Calculate the depreciation for a year 2011.

Calculation: The depreciation period of software by ITA is 36 months. Monthly depreciation: 72 000 / 36 = 2 000,--Depreciation for 2011:od 1. 5., i.e. 8 months = 8 x 2 000 = 16 000,--Example:

Straight-line depreciation:Increased input price x rate for increased price

Accelerated depreciation:a) In the year of increased input price2 x increased residual price/coefficient for increased priceb) in the following years2 x residual price/ coefficient for increased p. (number of years of increased input price depreciation)

Fixed assets depreciation from an increased input price(after technical evaluation)

According to which law are tangible assets classified into depreciation groups? commercial code trade law income tax law accounting lawAccumulated depreciation positive difference between input price of property and depreciationSmall repairsPositive difference between input price and residual price of propertySum of deprecations for the period of useWhen using accounting depreciation of fixed assets is it possible to write it off earlier than when using tax depreciation? yes no yes, when accelerated tax depreciationTask: Choose a correct answer:

Accounting depreciation of fixed assets:They should agree with the actual depreciation of fixed assets. Rates are set by Income Tax ActThey should agree with the actual depreciation of fixed assets. Rates are set by the company.They set a level of maximum depreciation that can be applied as tax deductible expenses.

The company has bought a production line, purchase price is CZK 1 270 000,-. Estimated number of products that should this production line produce during its service life is 63 500 pieces. In this year it has been produced 4800 products. Calculate the amount of depreciation for this year.

tohl, P. Uebnice etnictv 2011 2. dl pro stedn koly a pro veejnost. Znojmo: NAKLADATELSTV TOHL PAVEL ING. VZDLVAC STEDISKO,2011.ISBN 978-80-87237-36-6varcov J. a kol. Ekonomie -strun pehled, teorie a praxe aktuln a v souvislostech. Zln: TOPPEX, s. r. o., 2009. ISBN 978-80-903433-7-5

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