The issue of depreciation for chemical processing equipment
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I have a question regarding equipment depreciation: 1. Is machinery depreciation calculated directly on the original cost of the equipment, or must it be calculated based on the equipment’s value as a fixed asset? 2. How is the depreciation of chemical raw materials (catalysts) calculated? Is there a residual value, and how should the depreciation period be determined? Thank you
Upon investigation, it is said that the basis for determining equipment depreciation can be the purchase price of the equipment, depending on the role of the depreciation assessment. Chemical raw materials should be depreciated based on their useful life. What are everyone’s opinions?
1. Depreciation of mechanical equipment is calculated on the basis of the equipment being classified as fixed assets； 2. Chemical raw materials (catalysts) are included in costs based on their useful life and production volume. If it still has value at the end of its useful life, its residual value (such as that of precious metals, etc.) is calculated; costs associated with disposal (such as those related to toxicity or radioactivity, etc.) are generally included in the cost. It is a different concept from depreciation.