How is car depreciation calculated?
Depreciation of a car, without being expressed in scientific terms, is an accounting of its depreciation expressed in monetary terms. Any car requires costs: for repairs, for replacement technical liquids, to replace rubber, and, of course, the cost of refueling it with fuel.
When calculating the depreciation of a car, fuel costs are not taken into account.
Why do you need to calculate car depreciation?
- First, it is necessary for entrepreneurs and legal entities for filing documents with the tax authorities. Thus, the expenses of the company are described in detail so that the tax authorities do not have questions regarding the expenditure of funds.
- Secondly, depreciation is taken into account in insurance companies for a more accurate assessment of the real value of a car when its owner wants to conclude an insurance contract. Depreciation is also taken into account in banks or pawnshops when buying and selling used cars.
- Thirdly, a common situation is when a company employee uses his personal transport to perform his duties. In this case, the employer is obliged to take into account not only the cost of refueling, but also depreciation, that is, the wear and tear of the car. Typically, companies pay 1.5-3 rubles for each kilometer run.
Every owner of a private car should also take into account wear so that the cost of replacing filters or oil does not come as a surprise.
How is depreciation calculated?
Calculating the depreciation of a car is not as difficult as it might seem. For example, in many automotive magazines we can see such information that every kilometer that we drive on such and such a model of car costs us 3 rubles or 7, and this is in addition to the cost of refueling.
Where do these numbers come from?
If you do not have special accounting knowledge, then you just need to consistently take into account all the expenses for your car during the year: consumables, brake fluid, oil, parts replacement. As a result, you will receive a certain amount, for example, 20 thousand. Divide this amount by the number of kilometers traveled per year and find out how much one kilometer costs you.
You can also go the other way:
- take into account all expenses for the passage of scheduled inspections and technical inspections;
- see the instructions for how many kilometers you will need to replace all filters, process fluids, brake pads change the oil in the engine. Automatic transmission, power steering, etc. take into account the cost of all these works;
- perform complex mathematical calculations - divide the resulting amount by the mileage that your the car will pass by the time you get approximate the cost of one kilometer.
It is worth noting that this way will not be very accurate, if only because every year your cash costs for a car will only increase. But such a calculation will tell you how much money you need to have so that the next breakdown does not hit the budget very hard.
To get more accurate data, you need to not only take into account your costs for certain spare parts and consumables, but also:
- the age of the vehicle;
- his total mileage;
- the conditions under which it is operated;
- manufacturer (it's no secret that german cars don't need so much frequent repairs like Chinese);
- environmental conditions in the area where you live;
- climate humidity;
- type of region - metropolis, city, town, village.
In the accounting literature, you can find various coefficients that will help you more accurately calculate the depreciation of a vehicle. For example, all cars are divided into categories depending on age:
- up to five years;
- five to seven;
- seven to ten years old.
Accordingly, the older the vehicle, the more money you need to spend on it.
Formula for calculating depreciation Vehicle
Vehicle wear is calculated as a percentage. For this you need to know:
- wear indicator;
- actual mileage;
- wear due to old age;
- actual service life;
- adjustment factors - climatic and environmental conditions in the area where the car is used;
- region type.
All these indicators and ratios can be found in the accounting literature. If you do not want to delve into all these regulations and decrees of the Ministry of Finance, then you can find an online calculator for calculating depreciation on the Internet, and simply insert the actual data into the indicated fields.
- automobile domestic production, which we bought for 400 thousand two years ago;
- mileage for 2 years amounted to 40 thousand;
- operated in a city with a population of up to a million people.
- estimated wear - 18.4%;
- natural wear and tear - 400 thousand times 18.4% = 73,600 rubles;
- residual value - 326,400 rubles;
- market price taking into account obsolescence (20%) - 261,120 rubles.
We can also find out how much one kilometer of run costs us - we divide 73.6 thousand by 40 thousand and get 1.84 rubles. But this is without taking into account obsolescence. If we also take into account obsolescence, we get 3 rubles 47 kopecks.
It should be noted that obsolescence significantly affects the reduction in the cost of vehicles. However, it is rarely used, or the obsolescence coefficient is set at the level of one, that is, it does not affect the cost of the vehicle in any way.
Here you can argue with theorists for a long time and prove that some Audi A3 of 2008, compared to the new Lada Kalina of 2013, not only is not morally obsolete, but, on the contrary, has overtaken it by several decades.
Another important point- all the above coefficients are averaged and do not take into account many other objective factors, the main of which is the skill of the driver. Agree that on large motor transport enterprises practice a completely different approach than a small company delivering buns around the city. However, thanks to such calculations, you will know approximately how much it will cost you to operate the car. Also, this data can be used when buying used cars.
How to calculate the depreciation of a car in 2019 depends on the type of accounting - tax or accounting. In tax accounting, depreciation can be calculated in two ways, and in accounting - in four ways. Formulas and examples of calculating the depreciation of a car, see the article.
What is car depreciation
Cars that meet the criteria for property, plant and equipment transfer their value to costs through depreciation. Depreciation is a write-off of the value of a vehicle depending on the degree of its physical deterioration. Depreciation involves the gradual write-off of the cost of the car in installments throughout its life.
Depreciation must be charged from the month following the one in which the car was registered as a fixed asset (clause 21 PB 6/01). Depreciation should be stopped from the month following the one in which the car retired or fully paid off its value (clause 22 PBU 6/01).
Can depreciation be suspended?
Answered by Sergey Razgulin,
Acting State Councilor of the Russian Federation, 3rd class
The company has the right not to charge depreciation in the cases specified in paragraphs 23 and 26 of PBU 6/01. In particular, you do not need to depreciate a car for a repair period lasting more than 12 months. Full list cases.
How to calculate car depreciation in 2019 in tax accounting
In tax accounting, depreciation is calculated in one of two ways - linear or non-linear. The company fixes the chosen method in the accounting policy for taxation purposes (clause 1 of article 259 of the Tax Code of the Russian Federation).
From the beginning of the next calendar year, the organization has the right to change the chosen depreciation method. At the same time, it is possible to switch from a non-linear method to a linear one no earlier than five years after the start of its use (clause 1, article 259 of the Tax Code of the Russian Federation).
Line method
The undoubted advantage of this method is its ease of use. If the company decides to use it, depreciation must be charged for each object evenly throughout the entire period beneficial use. How to determine the useful life, said Oleg Khoroshiy, head of the corporate income tax department of the tax and customs policy department of the Ministry of Finance. A special service will help you set the right time.
Determine the depreciation rate for each object using the formula:
The monthly depreciation amount is calculated as the product of the initial (replacement) cost of the object and the depreciation rate (clause 2, article 259.1 of the Tax Code of the Russian Federation).
Example. How to determine the amount of monthly depreciation
The organization purchased a car at a price of 960,000 rubles. (without VAT). Useful life is 4 years. According to the accounting policy for tax purposes, depreciation is charged on a straight-line basis.
The accountant of the organization calculated the depreciation rate. It was 2% (1: 48 months x 100%). The monthly depreciation amount is 19,000 rubles. (950,000 rubles x 2%).
Nonlinear method
The non-linear method in the early years of depreciation allows you to write off the value of property faster than the linear method. However, it requires more complex calculations. The rules for applying this method are set out in article 259.2 of the Tax Code of the Russian Federation. When not to use the non-linear method >>
Depreciation must be calculated using the new non-linear method separately for each depreciation group. This must be done monthly. To determine the amount of depreciation per month, you need to use the formula:
The total balance is the sum of the residual value of all depreciable property items that belong to this depreciation group. Since depreciation is calculated monthly, the total balance must be determined on the 1st day of each month.
Depreciation rates for groups are established in paragraph 5 of Article 259.2 of the Tax Code of the Russian Federation. For example, for the first group, the norm is 14.3.
In March 2019, the company purchased and put into operation a car worth 500,000 rubles. Its useful life is 60 months (third depreciation group). For simplicity, we assume that during the period of operation of the facility, no fixed assets and intangible assets were received or disposed of by the company.
For the third depreciation group the depreciation rate is 5.6%. Accordingly, depreciation for April will be 28,000 rubles. (500,000 rubles x 5.6: 100), for May - 26,432 rubles. [(500,000 rubles - 28,000 rubles) x 5.6: 100)], June - 24,952 rubles. [(500,000 rubles - 28,000 rubles - 26,432 rubles) x 5.6: 100)], etc.
How to calculate car depreciation in 2019 in accounting
Depending on the nature of the use of the car, the depreciation accrued on it is included either in expenses for ordinary activities, or in other expenses, or in capital investments. This is done by wiring:
Debit 20 (26, 44, 91-2, 08...) Credit 02
Car depreciation charged.
The most common depreciation method is linear, which you are already familiar with. But besides it, accounting legislation offers a choice of three more options: the reducing balance method, the method of writing off the cost by the sum of the numbers of years of the useful life, and the method of writing off the cost in proportion to the volume of products (works).
Any of the listed depreciation methods can be applied to cars without restrictions. However, after the vehicle is put into operation, it is impossible to change the selected depreciation method (clause 18 PBU 6/01). Increasing (reducing) coefficients can be applied to depreciation rates only when depreciation is calculated using the reducing balance method. The maximum value of the multiplying factor is 3.0 (clause 19 PBU 6/01).
To calculate depreciation, you need to know the original cost of the car (replacement if it was revalued) and its useful life. The list of expenses that form the initial cost of the fixed asset,.
Decreasing balance method
Annual amount depreciation charges depends on the residual value of the fixed asset at the beginning of the reporting year and the depreciation rate, increased by the acceleration factor. The size of the coefficient you set yourself and reflect in the accounting policy. At the same time, its value cannot be more than 3. It turns out that you must determine the monthly depreciation amount annually as follows.
First determine the annual depreciation rate. To do this, use the formula:
Then calculate the annual depreciation amount. To do this, use the formula:
The organization purchased a car. The initial cost is 600,000 rubles. The vehicle entered service in December 2018. The useful life of the vehicle is four years. The multiplying factor according to the accounting policy is 2.0.
The annual depreciation rate is 25% (1: 4 x 100%), taking into account the acceleration factor - 50% (25% x 2).
In the first year of operation, depreciation deductions will be calculated based on the initial cost of the fixed asset. The depreciation amount will be 300,000 rubles. (600,000 rubles × 50%). From January 1 to December 31, 2019, you need to write off 25,000 rubles a month. (300,000 rubles: 12 months).
residual value fixed assets at the beginning of the second year is 300,000 rubles. (600,000 rubles - 300,000 rubles). The annual depreciation amount is 150,000 rubles. (300,000 rubles x 50%). Monthly depreciation charges, reflected from January 1 to December 31, 2020, will amount to 12,500 rubles. (150,000 rubles: 12 months).
Monthly depreciation for the third and fourth years of operation of the car is calculated in the same way.
Write-off method based on the sum of numbers of years of useful life
An annual depreciation rate is not required for the calculation. Therefore, immediately determine the annual amount of depreciation. To do this, use the formula:
The amount of depreciation to be charged monthly is 1/12 of the annual amount.
The depreciation method based on the sum of the number of years of useful life is effective in cases where the car is used more intensively at the beginning than later.
The method of writing off the cost in proportion to the volume of products (works)
Depreciation depends on the volume of products (works, services) produced in the reporting period and the expected volume of products for the entire useful life. Analyzing paragraph 19 of PBU 6/01, we can conclude that the annual depreciation amount is not determined, and the monthly one is calculated by the formula:
The advantage of this method is that the accrued depreciation most accurately reflects the physical depreciation of the fixed asset. The disadvantage is the high complexity of the calculations.
Depreciation of a car, without being expressed in scientific terms, is an accounting of its depreciation expressed in monetary terms. Any car requires costs: for repairs, for the replacement of technical fluids, for the replacement of rubber, and, of course, the cost of refueling it with fuel.
When calculating the depreciation of a car, fuel costs are not taken into account.
Why do you need to calculate car depreciation?
- Firstly, it is necessary for entrepreneurs and legal entities to submit documentation to the tax authorities. Thus, the expenses of the company are described in detail so that the tax authorities do not have questions regarding the expenditure of funds.
- Secondly, depreciation is taken into account in insurance companies for a more accurate assessment of the real value of a car when its owner wants to conclude an insurance contract. Depreciation is also taken into account in banks or pawnshops when buying and selling used cars.
- Thirdly, a common situation is when a company employee uses his personal transport to perform his duties. In this case, the employer is obliged to take into account not only the cost of refueling, but also depreciation, that is, the wear and tear of the car. Typically, companies pay 1.5-3 rubles for each kilometer run.
Every owner of a private car should also take into account wear so that the cost of replacing filters or oil does not come as a surprise.
How is depreciation calculated?
Calculating the depreciation of a car is not as difficult as it might seem. For example, in many car magazines, we can see such information that every kilometer that we drive on such and such a car model costs us 3 rubles or 7, and this is in addition to the cost of refueling.
Where do these numbers come from?
If you do not have special accounting knowledge, then you just need to consistently account for all the expenses for your car during the year: consumables, brake fluid, oil, replacement parts. As a result, you will receive a certain amount, for example, 20 thousand. Divide this amount by the number of kilometers traveled per year and find out how much one kilometer costs you.
You can also go the other way:
- take into account all expenses for the passage of scheduled inspections and technical inspections;
- see the instructions after how many kilometers you will need to replace all filters, process fluids, brake pads, automatic transmissions, power steering, etc., take into account the cost of all these works;
- perform complex mathematical calculations - divide the resulting amount by the mileage that your car has traveled by that time, and you get approximate the cost of one kilometer.
It is worth noting that this method will not be very accurate, if only because every year your cash costs for a car will only increase. But such a calculation will tell you how much money you need to have so that the next breakdown does not hit the budget very hard.
To get more accurate data, you need to not only take into account your costs for certain spare parts and consumables, but also:
- the age of the vehicle;
- his total mileage;
- the conditions under which it is operated;
- manufacturer (it's no secret that German cars do not need as frequent repairs as Chinese ones);
- environmental conditions in the area where you live;
- climate humidity;
- type of region - metropolis, city, town, village.
In the accounting literature, you can find various coefficients that will help you more accurately calculate the depreciation of a vehicle. For example, all cars are divided into categories depending on age:
- up to five years;
- five to seven;
- seven to ten years old.
Accordingly, the older the vehicle, the more money you need to spend on it.
Formula for calculating vehicle depreciation
Vehicle wear is calculated as a percentage. For this you need to know:
- wear indicator;
- actual mileage;
- wear due to old age;
- actual service life;
- adjustment factors - climatic and environmental conditions in the area where the car is used;
- region type.
All these indicators and ratios can be found in the accounting literature. If you do not want to delve into all these regulations and decrees of the Ministry of Finance, then you can find an online calculator for calculating depreciation on the Internet, and simply insert the actual data into the indicated fields.
Here's an example:
- a domestic-made car that we bought for 400,000 two years ago;
- mileage for 2 years amounted to 40 thousand;
- operated in a city with a population of up to a million people.
We receive data:
- estimated wear - 18.4%;
- natural wear and tear - 400 thousand times 18.4% = 73,600 rubles;
- residual value - 326,400 rubles;
- market value, taking into account obsolescence (20%) - 261,120 rubles.
We can also find out how much one kilometer of run costs us - we divide 73.6 thousand by 40 thousand and get 1.84 rubles. But this is without taking into account obsolescence. If we also take into account obsolescence, we get 3 rubles 47 kopecks.
It should be noted that obsolescence significantly affects the reduction in the cost of vehicles. However, it is rarely used, or the obsolescence coefficient is set at the level of one, that is, it does not affect the cost of the vehicle in any way.
Here you can argue with theorists for a long time and prove that some Audi A3 of 2008, compared to the new Lada Kalina of 2013, not only is not morally obsolete, but, on the contrary, has overtaken it by several decades.
The straight-line method of calculating the depreciation of fixed assets and intangible assets is the most common method in accounting and tax accounting. The use of this method is appropriate when the economic benefits from the use of the depreciable item flow evenly over the useful life, or the flow of such benefits cannot be measured reliably. Also, the use of a linear method in tax accounting, in contrast to a non-linear one, in some cases. We will show how to calculate depreciation in a linear way using an example in our consultation.
Straight line depreciation formula
For the linear depreciation method, we will give formulas that allow us to determine the monthly depreciation amount (AM) of fixed assets (OS) and intangible assets (IA) in accordance with the procedure provided for by PBU 6/01, PBU 14/2007 and Ch. 25 of the Tax Code of the Russian Federation:
| Straight line depreciation formula | ||
|---|---|---|
| in accounting | in tax accounting||
| A M = C * K Where C is the initial or replacement cost of an asset or intangible asset; |
||
And how to calculate the depreciation rate in a linear way in tax accounting? This rate, as in accounting, depends on the useful life. Therefore, the calculation of the depreciation rate in a linear way according to the rules of Ch. 25 of the Tax Code of the Russian Federation looks like this: 1 / SPI * 100%, where SPI is the useful life in months.
Despite the fact that the formulas for calculating depreciation using the linear method in accounting and tax accounting at first glance are different, the procedure for calculating depreciation values is essentially the same.
Therefore, to calculate linear depreciation the formula for determining the monthly value (A) for simplicity can be expressed as follows:
A = C / SPIwhere C is the cost of the depreciable object, from which depreciation is calculated;
SPI - the useful life of the depreciable object in months.
Straight-line depreciation: example
We will show how to calculate depreciation using a straight-line method using an example. It does not matter whether it is necessary to preliminarily determine the annual amount of depreciation in a linear way (as for fixed assets) or the monthly amount is immediately calculated, the final values of the monthly amounts in accounting and tax accounting will still be the same.
To confirm, we will calculate the depreciation of a car in a linear way in accounting and tax accounting, and also show how to calculate depreciation in a linear way in accounting for intangible assets (for example, the author's exclusive right to a computer program).
To calculate depreciation charges using the straight-line method, we use the same input data for the OS object (garbage truck) and intangible assets (exclusive right to the program): the initial cost is 1,750,000 rubles. SPI - 10 years (120 months). In order to determine the amount of depreciation deductions in a linear way, we will use the above formulas.
And the calculation of depreciation deductions in a linear way is given in the table.
As soon as they leave the dealership - more precisely, as soon as they formally have an owner. The size of the loss in value is determined by a number of factors, the most significant of which are the age of the car, its make and model, the conditions and intensity of operation, the reputation of reliability and durability, and a small number of others.
This decrease in value is known as depreciation, and it's the word that most frustrates new-car buyers from a car dealership. Unless the car is a vintage or vintage model that often ends up selling for a fortune at auction, most vehicles on the road are slowly but surely depreciated, no matter what the owner of the car does with them.
There are many things you should consider when buying a new or used car - the cost of gasoline, Maintenance, taxes and the cost of OSAGO . But there's one more important thing to keep in mind when it comes to buying a car, and that's how much it's depreciated. So why do cars depreciate, how much can your car depreciate and what to look for when buying a new and used car?
We very rarely take into account the depreciation of the car when buying it. It would seem that there are more pressing issues regarding the cost of a car. Unpaid loan payment on time, OSAGO insurance, a rattle that suddenly appeared and the diagnostics that followed it. And depreciation is taken into account as a background expense - in the future, which, it seems, will never come. But depreciation always comes at the wrong time and very often makes itself felt not in best light. This desperation some even call " silent thief"because of the way in which it constantly reduces the return on investment in your car.
One fine day, you just realize that a used car of your year of manufacture is now not worth what you always thought, but much cheaper.
How to calculate car depreciation?
The standard for average car depreciation is 15 to 20 percent of their value each year. Thus, a car that serves its owner faithfully for three years will cost approximately 65-75% of the cost of a new car.
Moreover, the above percentages must be calculated correctly. If, for example, your particular car loses 15% in price annually, this does not mean that in three years it will lose 45% in price. It will be easier to explain this depreciation calculation with an example: if new car costs 1 million rubles, then in a year it will cost 850 thousand (a million minus 15%), and in two - 722,500 rubles (850,000 minus 15%), in three - 614,125 rubles (722,500 minus 15%) and so Further.
And many more calculate depreciation on fuel consumption, believing this to be a more logical calculation - after all, in this case, not the age of the car, but its operation is taken into account. This is especially true for commercial and trucks. In this case, depreciation is calculated as equal to the cost of fuel costs for the year. That is, if, for example, you spent 72,000 rubles on gasoline in a year, then the cost of your car has decreased so much.
This depreciation calculation also has its own significant disadvantage- two cars, with a dozen times difference in the cost of a new car, can consume the same amount of fuel, moreover, with different annual mileage. So, for example, nothing prevents some Bentley for 10 million from spending the same 72,000 rubles a year on fuel. But it will obviously lose in price faster.
But depreciation has one more feature - it occurs non-linearly. The first year usually sees the steepest decline in price. In fact, at the moment when a new car is rolled out of a car dealership, it instantly loses in price from 5 to 20%.
