Checking accounting for depreciation calculations
During the audit, it is necessary to establish whether all fixed asset items are taken into account when calculating depreciation, whether it is calculated taking into account the movement of fixed assets, whether depreciation rates are applied correctly.
Depreciation is charged for all types of fixed assets, with the exception of land and natural resources that are under conservation, objects of housing stock and external improvement, a library fund, museum and artistic values, productive animals on the balance sheet of the enterprise.
On an item of fixed assets, depreciation starts from the first day of the month following the month of the object's acceptance to accounting records and is accrued until it is completely repaid or written off from accounting in connection with the termination of ownership or other proprietary right.>
Depreciation deductions for fixed assets from the first day of the month following the month of full repayment of its value or write-off from accounting are terminated.
Depreciation charges on fixed assets in the accounting of the reporting period to which they relate are reflected and accrued irrespective of the results of the organization's activity in the reporting period.
Depreciation charges on fixed assets are reflected in the accounting records by accumulation of amounts on a separate account.
Currently, the following options for calculating depreciation can be applied:
1) the method of decreasing balance;
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2) the method of writing off the value of the sum of the numbers of useful life years;
3) the way of writing off the cost in proportion to the volume of products (works).
During the reporting year, depreciation charges for fixed assets are accrued monthly irrespective of the applied method of calculation in the amount of 1/12 of the annual amount.
Here it is important to establish the correctness of assigning fixed assets to the appropriate group of depreciation charges. In order to verify the correctness of the depreciation of costs or other sources, it is necessary to establish the type of fixed assets, whether production or non-production.
When conducting an audit of the depreciation charge, the auditor should pay special attention to the accrual of depreciation on fixed assets not related to industrial production (for example, cultural objects), to determine whether it is included in the cost of production. This is done with a view to reducing the costs of maintaining non-industrial objects, and such cases are identified during inspections.
Due to the fact that at present many enterprises are idle or working in less than two shifts, are in reserve or are suspended, an important element of the check is the uniformity of suspension of the depreciation charge or the application of lowering coefficients to the current standards (most depreciation rates are established based on from two-shift operation of the equipment).
It is important to check whether depreciation continues on depreciation of fixed assets already full of depreciation; Are errors in the definition of depreciation rates allowed, especially for those fixed asset objects in whose documents the codes are not specified.
When controlling depreciation, it is necessary to take into account that some enterprises are allowed to apply the method of accelerated depreciation of the active part of production fixed assets. Accelerated depreciation is applied and formalized by the enterprise as an element of accounting policy.
When checking the depreciation of fixed assets, you should check how depreciation is calculated for types and depreciation groups for tax purposes in accordance with Art. 257 and 258 TC.
If an auditor detects errors, you need to bring information about them to the client's attention, suggest correcting them and make the necessary adjustments to registers and reporting forms.
For all facts of incorrect accrual of depreciation, amounts of excessively accrued or unqualified depreciation are determined. Establish how this affected the cost of production and financial results, identify the causes of violations and the perpetrators, suggest measures to prevent such shortcomings in the future.
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