Optimal methods of depreciation forming

Economic Annals-ХХI: Volume 146, Issue 11-12, Pages: 120-123

Citation information:
Filatov, E. (2014). Optimal methods of depreciation forming. Economic Annals-XXI, 11-12, 120-123. https://ea21journal.world/index.php/ea-v146-30/

Evgeniy Filatov
PhD (Economics),
Associate Professor,
Department of Economic Theory and Finance,
National Research Irkutsk State Technical University
83 Lermontov Str., Irkutsk, 664074, Russia
johnru3000@rambler.ru

Optimal methods of depreciation forming

Abstract. Depreciation applying is governed by the rate of turnover of fixed assets. It intensifies the renewal process; helps implement technical and production policy of the company. Depreciation policy gives effect to the certain levers which affect the economy and the financial results of the individual enterprises.

Long-term planning of activity at all and the financial one in particular is one of the cornerstones of modern management. The author’s method usage to form depreciative policy allows cutting uncertainty while making decisions connected with commercial organizations’ development. The article is devoted to finding optimal strategies for depreciation calculation by comparative analysis of the straight-line and proposed by the author methods. It presents a new method of depreciation policy variation calculations based on handling of the introduced by the author coefficients (linear, step and correction coefficients), making it possible for an economic entity to reasonably form and distribute amortization fund in accordance with the market situation.

Keywords: Depreciation Policy; Depreciation; Investments; Straight-Line Method; Coefficients

JEL Сlassіfіcatіon: M21; M41

References

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Received 20.09.2014