How to account for depreciation when purchasing fixed assets? To help you clarify this issue, MISA MeInvoice would like to share information related to accounting for depreciation of fixed assets .
Note: Before learning about how to account for depreciation of fixed assets, you can learn about detailed information about fixed assets in the article for more information.
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1. What is fixed asset depreciation?
2. How to account for depreciation when purchasing fixed assets
2.1 Accounting for depreciation when purchasing fixed assets that do not require installation or testing
2.2 Accounting for depreciation when purchasing fixed assets that MUST be installed and tested
2.3 Accounting in case of receiving capital contribution or receiving capital granted in the form of fixed assets:
What is fixed asset depreciation?
how to account for depreciation of fixed assets
Depreciation of fixed assets is the systematic valuation and allocation of the value of assets due to wear and tear over a period of use.
Depreciation of fixed assets is the depreciation calculated into production and business costs during the time of using that asset. Understanding more about depreciation of fixed assets is related to the wear and tear of assets, which is the gradual decrease in value or use value due to use or participation in the production process, which can be due to wear and tear from natural impacts or due to scientific and technological progress.
2. How to account for depreciation indonesia telegram data when purchasing fixed assets
2.1 Accounting for depreciation when purchasing fixed assets that do not require installation or testing
If you buy assets without installation, testing, investment, etc. (no other costs incurred) and can use them immediately, then account for:
Debit account 211: (Original price does not include VAT)
Debit account 1332: Deductible VAT
There is account 1121 / account 331:
In case of purchasing tangible fixed assets received with spare parts
There are accounts 111, 112, 331…
– In case of purchasing tangible fixed assets by user-friendliness on mobile devices deferred payment or installment payment:
When purchasing tangible fixed assets by installment payment saudi data and putting them into immediate use for production and business, record:
There are accounts 111, 112, 331.
Periodically, pay money to the seller, record:
Debit account 331: Payable to seller
There are accounts 111, 112 (periodic payable amount including principal and interest on late payment and installment payments payable periodically).
Periodically, calculate into expenses the amount of late interest and installment payments payable for each period, record:
Debit account 635: Financial expenses
Credit account 242: Prepaid expenses.
– In case of being sponsored, donated, or given tangible fixed assets to be put into immediate use for production and business, record:
Debit account 211: Tangible fixed assets
Credit account 711: Other income.
Other costs directly related to tangible fixed assets that are sponsored, donated, or given are included in
the original price and recorded as follows
There are accounts 111, 112, 331,…
– In case of purchasing tangible fixed assets such as houses and structures attached to land use rights, put into immediate use for production and business activities, record
There are accounts 111, 112, 331,…
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