* Average depreciation method (also called the method of straight-line depreciation).
This is a simple method of depreciation most commonly used to calculate depreciation and amortization of business types. Under this method, the rate and annual depreciation rate is determined at the rate unchanged for the duration of the asset.
However, in reality the average depreciation methods can be used with certain variations to suit the characteristics of the fixed assets used in each sector, each enterprise
Overall, the average depreciation method is widely used due to its advantages. This is a simple method of calculation, easy to understand. The depreciation expense is calculated on product prices will stabilize and thus will facilitate product price stability. Creating competitive advantage for businesses, in enterprises using synthetic average depreciation for all types of enterprise fixed assets will reduce the quantity of calculations, facilitate the planning of their depreciation Enterprise. However the downside of this method is not accurately reflect the actual level of fixed asset depreciation and the cost of products and in the period of the asset will not be the same. Moreover, because of the average should irrecoverable slow investment and thus can not limit adverse effects of HMVH for fixed assets in the enterprise.
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