What Is Wasting Asset?

　 What is? Wasting assets

Wasting assets refer to assets that can be used for a long time and whose value gradually decreases. That is, resources gradually exhausted through mining, logging and utilization, so that they can not be recovered or renewed, or are replaced by original ones. Generally speaking, natural resources such as mineral deposits, oil fields, forests, etc., are gradually consumed by mining or logging, and their value decreases with the consumption of resources. These assets are characterized by reduced logging. Therefore, these assets are listed as long-term assets on the balance sheet before mining. The depletion assets in assets are converted into deposit and loan in current assets after mining.

　　 Wasting assets Characteristic

Most of the consumption assets can not be reset. Only assets such as forest can be replanted through afforestation. Most of the fixed assets depreciated should be reset. The production produced by natural resources due to mining or logging is directly available for sale, while depreciable assets belong to the means of production. It helps the production of products rather than directly forming part of the commodity.

　 Wasting assets Evaluation

The factors that consider the valuation of wasting assets are as follows: (1) possession of quantities, such as the amount of mineral reserves and the area of forests; secondly, the quality of existing substances, that is, the effective value of the existence, such as mineral contents and minerals of mineral deposits; 3. The price of the existence; 4. The various expenses incurred by the exploration resources; and the geographical location. Wasting assets should be accounted for at the cost of assets. As a result of the increase in market value, the accounts are generally not reflected except for revaluation of assets. However, after the acquisition of assets, new natural resources are discovered, or the amount of reserves discovered through exploration is much higher than the original estimate. Therefore, the value of assets is increased, and the book value of deplete assets should be increased according to these facts. Degenerated assets must be fixed assets such as houses and machines. If the consumption assets are estimated to be shorter than the life of these fixed assets, the years of wasting assets will be used as the years of depreciation. The depreciation can be calculated as the same consumption.

Depletion of depleted assets

The cost of wasting assets is gradually reduced with the consumption of resources, and the portion to be sold is called depletion. Depletion occurs only when mining, logging and so on. It is a direct erosion of natural resource entities. Depreciation refers not to the depletion of fixed assets, but to the decrease in value caused by wear. Depletion is usually calculated by the depletion of assets, such as tons, barrels, kilometre (or 1000 feet), and so on, to calculate the cost of unit products, and then use the quantity of products to be taken in each period to get the unit cost, so as to obtain the accrued cost per period. According to China's current financial system, the consumption assets are not reflected in the single accounting items, but the extraction and harvesting industries are extracted and upgraded according to their output.

In accounting subjects, the Chinese accounting items for wasting assets are in English and Chinese (including subject code):

16 deplete assets depletable assets 161 depletion assets depletable assets