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D ivision of long - term fixed assets

D ivision of long - term fixed assets. Long-term intangible fixed assets Long-term tangible fixed assets Long-term financial assets. Long-term intangible fixed assets:. setting-up expenses, intangible results of research and development, software, valuable rights,

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D ivision of long - term fixed assets

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  1. Division of long-term fixed assets

  2. Long-term intangible fixed assets • Long-term tangible fixed assets • Long-term financial assets

  3. Long-term intangible fixed assets: • setting-up expenses, • intangible results of research and development, • software, • valuable rights, • and other asset which input price is higher than CZK 60,000 and its useful life is higher than one year.

  4. Long-term tangible fixed assets: • buildings, houses, and flats or non-residential premises, • separate movable objects or set of movable objects which can only function together as an independent technical and economic unit the input price of which is over CZK 40,000 and their operational and technical life expectancy exceeds one year, • fields of perennial vegetation (orchards and vineyards) yielding a harvest for more than three years, • basic livestock herds and draught animals.

  5. Long-term financial asset: This asset is not depreciated. This group includes ownership interests and other long-term credit securities.

  6. Depreciation of long-term tangible fixed assets No. 586/1992 Coll., Act on Income Taxes

  7. Depreciation methods of long-term tangible fixed assets the straight line depreciation the accelerated depreciation

  8. The straight method of depreciation:

  9. Annual depreciation rate for the first year of depreciation Input price 1st year - IP x ADR1 2nd year and subsequent years – IP x ADRs Annual depreciation rate for subsequent years of depreciation

  10. Example of straight method of depreciation(an ultra-sound machine)(input price = CZK 300,000)

  11. The accelerated method of depreciation

  12. Input price Coefficient for Accelerated Depreciation 1st year - IP / c1 2nd year and subsequent years - (2 x RC) / (cs- n) Period of depreciation Residual value Coefficient for Accelerated Depreciation in subsequent years

  13. Example of accelerated method of depreciation (an ultra-sound machine)(input price = CZK 300,000)

  14. The example of calculation – for increased residual value(personal motor car – IP = CZK 300,000,improvement = CZK 50,000 in 2009) + CZK 50,000

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