Depreciation life of fixed assets in catering industry

According to Article 60 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC), unless otherwise stipulated by the competent departments of finance and taxation of the State Council, the minimum depreciation period of fixed assets is as follows:

(a) houses and buildings, for 20 years;

(2) Aircraft, trains, ships, machines, machinery and other production equipment, 10 year;

(3) Appliances, tools and furniture. 5 years related to production and business activities;

(4) Four years for vehicles other than airplanes, trains and ships;

(five) electronic equipment, for 3 years.

Fixed assets and intangible assets are used to produce products and also have costs. Its value, that is, its cost, needs to be included in the cost of products. It needs to be repaid in installments. This is why fixed assets are depreciated.

However, according to the accrual principle, the amortization period of his cost should not be just one year, but his service life. Therefore, it is necessary to reasonably estimate the cost to be amortized in each period, that is, the annual depreciation and amortization. If it is amortized directly at the time of purchase, the expenses in the current year will be high, the profits will be reduced, and the profits in future years will be overestimated. This is not allowed by accountants.

One of the main characteristics of fixed assets is that they can play a role in several production cycles and keep their original physical form, while their value is gradually transferred to the products produced with the wear and tear of fixed assets. The value of fixed assets transferred to products is the depreciation of fixed assets.

Extended data:

Accounting standards stipulate that the cost of fixed assets that have reached the scheduled usable state but have not been settled and completed shall be determined according to the estimated value, and depreciation shall be accrued; After the final accounts of completion are processed, the original provisional valuation will be adjusted according to the actual cost, but there is no need to adjust the originally accrued depreciation.

The Ministry of Finance's Notice of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Enterprise Income Tax of Telecom Enterprises (Caishui [2004] No.215) stipulates that telecom enterprises adjust the value of fixed assets due to reasons such as adjusting the original provisional valuation according to the actual final settlement value or finding that the original valuation is wrong;

In addition, the depreciation undercharged in previous years should be supplemented according to the regulations, and it is not allowed to be deducted in the supplementary year. The taxable income of the original year is adjusted accordingly, and the corresponding overpayment can offset the income tax payable in future years.

In other words, the tax law requires that after the value of fixed assets is determined, the original provisional valuation value should be adjusted according to the actual value, and the depreciation that was undercharged (overcharged) in the previous year should be supplemented (overcharged) according to regulations, and the taxable income of the original year should be adjusted accordingly.

Baidu Encyclopedia-Depreciation of Fixed Assets