Depreciation of Fixed Assets

Depreciation of Fixed Assets refers to the depreciation of fixed assets in a given period, drawn in accordance with the stipulated depreciation rate for the purpose of compensating the wear-and-tear loss of the fixed assets or the depreciation of fixed assets imputed in accordance with the stipulated unified depreciation rate in the national economic accounting system. It reflects the value of the transfer of the fixed assets in the production of the current period. The depreciation of fixed assets in various enterprises and institutions managed as enterprises refers to the depreciation expenses actually drawn. In government agencies and institutions not managed as enterprises that do not draw the depreciation expenses, as well as for the houses of residents, the depreciation of fixed assets is the imputed depreciation, which is calculated in accordance with the stipulated unified depreciation rate. In principle, the depreciation of fixed assets should be calculated on the basis of the re-purchased value of the fixed assets. However, currently, the conditions in China do not facilitate the revaluation of all the fixed assets. Therefore, only the above-mentioned methods can be adopted at present.