From an economic point of view, depreciation implies assignment for current expenses of the past in order to maximize the cost of balancing revenues and expenses.Since 2002, there are 2 methods of depreciation: linear and nonlinear.Moreover, in order to calculate the amount of depreciation is necessary to know the useful life of each asset and its cost.

How to choose the method of depreciation

straight-line method of depreciation implies expensing of the asset in equal installments over the entire period of its use.It is the most common due to the simplicity of its use.Using the straight-line method is optimal for those assets whose service is limited to physical wear and tear, not obsolescence.

nonlinear method is sometimes referred to as rapid as in the beginning of fixed assets depreciation of his maximum, and then it gradually decreases.There are several variations of depreciation a non-linear manner, for example by:
- declining balance;
- depreciation is the sum of numbers of years of useful life;
- depreciation in proportion to the volume of goods (works).

Choice of depreciation is carried out by management and is fixed in its accounting policies.

useful life of fixed assets

All available company's fixed assets must be properly classified and assigned to a certain depreciation groups.There are eight groups of depreciation, their list and characteristics presented in the Resolution of the Russian Government dated 01.01.2002 №1.Each group contains uniform objects with the same period of their use.The assignment of a particular group of objects is based on the expected period of use and the possibility of obsolescence.

procedure for calculating the amounts of depreciation

most frequently accountants need the formula for calculating depreciation on the straight-line method and the declining balance method.

- Amortization of straight-line method is calculated as follows:

depreciation rate of 100% / number of months of use of the asset.

Monthly depreciation = cost of fixed assets / number of months of use.

- Depreciation on declining balance method is calculated as follows:

Depreciation rate = 100% * The acceleration factor / number of years of use of the asset.

Monthly depreciation = cost of fixed assets depreciation rate * / 100% / 12 months.