Chapter 5: Depreciation and Corporate Tax

23年 5月 3日 1IE of CSU. Kim, Gyutai

Operating, Investing, and Financing Expenses

In chapter 5, we will learn the role of a depreciation cost and tax in an income statement, and how to calculate them.For the purpose, we need to be familiar with some of the important accounting principles.

Accrual Basis PrincipleThe accrual basis principle requires that revenues and expenses be recorded when, and as soon as , they are incurred, regardless of when cash flows (ex. prepaid expenses, or account receivable)Revenue Recognition PrincipleRecognize means to record an event for the purpose of reporting its effects in the financial statement.(1) Revue should be recognized at the time it is earned. In most cases, revenue is recognized and reported on the income statement at the time the earning process is essentially complete.(ex. unearned revenue account)(2) The inflow of assets associated with revenue does not have to be in the form of cash.(ex. account receivable, credit sales).23年 5月 3日 2IE of CSU. Kim, Gyutai

Cost PrincipleRequirements: Financial statement information must be based on costs incurred in business transactions. In applying the cost principle, cost is measured on a cash or cash equivalent basis(ex., vehicle traded value)Reasons for complying with the cost principle (1) It puts relevant information in the financial statement. (2) It is consistent with the objective principle."Most accountants believe that information based on actual costs is more reliable than information based on estimates of values.

Matching PrincipleWith matching principle, expenses should be reported on the income statement in the same accounting period as the revenues that were earned as a result of the expenses.Going-Concern PrincipleRequirements:Financial statements must reflect the assumption that the business will continue operating instead of being closed or sold.

23年 5月 3日 3IE of CSU. Kim, Gyutai

Operating Expenses: cash flows from operations include current sales revenue, cost of goods sold, and operating expenses. The interest portion of a loan repayment is deductible expense when determining net income, and it is included in the operating activities. cf: operating costs of manufacturers: (1) expensing of noninventoriable capitalized costs and (2) costs from all parts of the value chain, such as R&D, product design, marketing, and administrative that are expensed immediately as incurred.Investing Expenses: Three types of investment flows are associated with buying a piece of equipment: the original investment, salvage value at the end of its useful life, and working capital investment or recovery. It is generally assumed that the outflows for both capital investment and working capital investment are as if they take place in year 0.Financing Expense: Cash flows from financial activities are an amount of money borrowed and principal repayment. 23年 5月 3日 4IE of CSU. Kim, Gyutai

The Characteristics of DepreciationA depreciation cost is not a cash flow in a current year. Actually, it took place at which the equipment was purchased.There are two different kinds of depreciation costs depending on in which are dealt with.(1)We can think of a depreciation cost which is calculated into a product cost. For this case, we can freely calculate the depreciation cost.(2) There is other depreciation cost which should be calculated according to the tax rules and is absolutely independent of a product cost.To calculate the second depreciation cost, we need to consider the following five things in advance.

23年 5月 3日 5IE of CSU. Kim, Gyutai

Depreciable Property1. It must be used in business or held for production income.2. It must have a definite service life, and that life must be longer than 1 year3. It must be something that wears out, decays, gets used up, becomes obsolete,

or lose value from natural causes.

Depreciable Cost(cost basis): The cost basis of an asset represents the total cost that is claimed as an expense over an asset’s life, i.e., the sum of the annual depreciation expenses. It generally includes the actual cost of an asset and all other incidental expenses, such as freight, site preparation, and installation.

Five Factors to Consider

23年 5月 3日 6IE of CSU. Kim, Gyutai

Useful Life and Salvage Value: Over how many periods will an asset be useful to the company? What do published statutes allow you to choose as the life of an asset? These are the central questions to be answered when determining an asset’s depreciable life, i.e., the number of years over which an asset is to be depreciated. Historically, depreciation accounting included choosing a depreciable life that was based on the service life of an asset. Determining the service life of an asset, however, as often very difficult, and the uncertainty of these estimates often led to disputes between taxpayers and the central office of national tax administration. The salvage value is an asset’s estimated value at the end of its life. It is the amount eventually recovered through the sale, trade-in, or salvage. The eventual salvage value of an asset must be estimated when the depreciation schedule for the asset is established. Depreciation Methods: Book and Tax Depreciation One important distinction within the general definition of accounting depreciation should be introduced. Most firms calculate depreciation in two different ways, depending on whether the calculation is (1) intended for financial reports(book depreciation method), such as for the balance sheet or income statement or (2) for the Internal Revenue Service, for the purpose of calculating taxes(tax depreciation). 23年 5月 3日 7IE of CSU. Kim, Gyutai

23年 5月 3日 IE of CSU. Kim, Gyutai 8

구분 자산 또는 업종 구분 기준 내용연수 내용연수 범위

건축물 등

차량운반구 , 공구 , 기구 및 비품 5 년 4-6 년

선박 , 항공기 ( 운수업외의 업종에서 사용 하는 것에 한함 ) 12 년 9-15 년

연와조 , 블록조 , 콘크리트조 등의 건축물 20 년 15-25 년

철골 , 철근콘크리트조 등의 건축물 40 년 30-50 년

업종별 자산 ( 건축물 등을

제외한 나머지 유형고정자산 )

농업 , 건설업 , 도 소매업∙ , 정보처리 및 기타 컴퓨터 운용관련업 , 금융보험업 등 5 년 4-6 년

의복제조업 , 숙박 음식점업∙ , 여행알선∙운수 관련 서비스업 등 8 년 6-10 년

음식료품 , 섬유제품 , 가죽 가방 신발 제조업∙ ∙ , 자동차 및 트레일러 제조업 등 10 년 8-12 년

담배제조업 , 수상 항공운수업 등∙ 12 년 9-15 년

전기 , 가스 및 수도사업 20 년 15-20 년

시험연구용 자산광학기기 , 시험기기 , 측정기기 , 공구 , 기타 시험연구용 설비 3 년

건물부속설비 , 구축물 및 기계장치 5 년

국내세법에 의한 기준내용연수 및 내용연수범위 (2001.12.31 개정 )

23年 5月 3日 IE of CSU. Kim, Gyutai 9

자산종류 신고시 무신고시

1. 건축물과 무형고정자산 ( 광업권제외 ) 정액법 정액법

2. 건축물 외의 유형고정자산 ( 광업용 유형고정자산 제외 ) 정률법 또는 정액법 정률법

3. 광업권 ( 해저광물 개발법에 의한 채취권 포함 )

정액법 또는 생산량비례법 생산량비례법

4. 광업용 유형고정자산 정률법정액법 또는 생산량비례법 생산량비례법

Ex 5.1] Cost Basis

Given] Purchase Cost(I)= 62,500,000 won, freight= 725,000won, installation labor=2,150,000won, space= 3,500,ooo won

Purchase Cost 62,500

+ Freight 725

+ Installation Labor 2,150

+ Preparation 3,500

Cost Basis 68,875

(unit: 000 won)

23年 5月 3日 10IE of CSU. Kim, Gyutai

Cost Basis

In general, there are three different kinds of book depreciation methods① Straight-Line Method②Accelerated Method③Units-of-Production Method

23年 5月 3日 IE of CSU. Kim, Gyutai 11

Book Depreciation

Principle It interprets a fixed asset as one that provides its service in a uniform fashion. The asset provides an equal amount of service in each year of its useful life. Equation Annual Depreciation Cost where , I= cost basis S= salvage value N= depreciable life (There is no allowance for a salvage value in a Korean Tax Law) Book Value

NSIDn /)(

)(DnIBn

23年 5月 3日 12IE of CSU. Kim, Gyutai

Straight-Line Method

I = 1,000,000wonN = 5 yearsS = 0D = (I - S)/N

Annual Depreciation CostBook Value

(unit: ooowon)

D1

D2

D3

D4

D5

B1

B2

B3

B4

10,000

8,000

6,000

4,000

2,000

0 1 2 3 4 5

Total Depreciation Cost

n

n Dn Bn

1 2,000 8,000

2 2,000 6,000

3 2,000 4,000

4 2,000 2,000

5 2,000 023年 5月 3日 13IE of CSU. Kim, Gyutai

Ex 5.2] SL

Principle It recognizes that the stream of services provided by a fixed asset may decrease over time: in other works, the stream may be greatest in the first year of an asset’s service life and least in its last year. This may happen because the mechanical efficiency of an asset tends to decline with age. One of the most frequently used methods is called a “Declining Balance Method”. In order to calculate an annual depreciation cost, we first need to determine the depreciation ratio denoted by α. Equation Annual Depreciation Cost Book Value (According to a Korean Tax Law, only 5% of salvage value is allowed to justify calculating a depreciation cost)

1 nn BD

nn IB )1(

N/1)05.0(1

23年 5月 3日 14IE of CSU. Kim, Gyutai

Accelerated Method

I = 1,000,000wonN = 5 yearsS = 500,000won

Annual depreciation cost

Book value

n Dn Bn

0 10,000

1 4,507 5,493

2 2,476 3,017

3 1,360 1,657

4 746 9115 411 500

D1

D2

D3D4 D5

B1

B2

B3 B4

10,000

8,000

6,000

4,000

2,000

0 1 2 3 4 5

Total Depreciation Cost

n

500B5

( 단위 :천원 )23年 5月 3日 15IE of CSU. Kim, Gyutai

Ex] DB

Ex 5.3] CFS Based Two Depreciation MethodsFinancial Date - Investment: 125,000,000 won - Project Life: 5years - Annual Revenue: 100,000,000 won - Annual Expenses: Labor: 20,000,000 won Material : 12,000,000 won Overhead: 8,000,000 won - Working Capital : 23,000,000 won - Financing: 625,000,000 won - Borrowing Rate: 10%, Equal Payment - Depreciation Methods: The SL and DB with a Depreciable Life of 8 Years - No Salvage Allowed - Tax Rate: 25% - MARR: 15%23年 5月 3日 16IE of CSU. Kim, Gyutai

Cash Flow Statements Based on the SL and DB Method

1. Depreciation Costs - Case 1: With the SL Method(the Same as in Ex 4.3)

- Case 2: With the DB Method(125,000 0) 15,625,000

8I SD won

N

31234.0)05.0(1 8/1

n Dep. Cost Book Value Cum. Dep. Cost1 125,000 0.31234=39,042.5 125,000-39,042.5=85,957.5 39,042.52 85,957.5 0.31234=26,848 85,957.5-26,848=59,109.5 65,890.53 59,109.5 0.31234=18,462.3 59,109.5-18,462.3=40,647.2 84,352.84 40,647.2 0.31234=12,695.7 40,647.2-12,695.7=27,951.5 97,048.55 27,951.5 0.31234=8,730.4 27,951.50-8.730.4=19,221.1 105,7796 19,221.1 0.31234=6,003.5 19,221.1-6,003.5=13,217.6 111,782.57 13,217.6 0.31234=4,128.4 13,217.6-4,128.4=9,089.2 115,9118 9,089.2 0.31234=2,838.9 9,089.2-2,838.9=6,250.3 125,000

(Unit: 000 won)

23年 5月 3日 17IE of CSU. Kim, Gyutai

Two Depreciation Costs

2. Gain(Loss) Taxes - Case 1: with the SL Method(the Same as in Ex. 4.3) 1

( _ _ )

5 (15,625 / _ _ )78,125,000

n

tt

Annual Depreciation Cost

Annual Depreciation Costwon

Cumul ati ve Depreci ati on Cost

( _ ) - (Cumulative_Depreciation_Cost)125,000 78,125 46,875,000Initial Investment

won

Book Val ue

( _ ) (Book_Value)50,000 46,875 3,125,000Salvage Value

won

Gai n/ Loss

( arg _ _ ) ( / )(0.25) (3,125) 781,300M inal Tax Rae Gain Loss

won

Gai n/ Loss Taxes

23年 5月 3日 18IE of CSU. Kim, Gyutai

Gain(Loss) Taxes for the Sales of the Assets

- 경우 2: 정률법에 의한 감가자산처분세 계산 ( 예제 4.3 경우와 동일 )

)(779,105)4.730,84.695,123.8462,1848,265.042,39(

)(1

천원

연간감가상각비감가상각비총누적된

n

tt

)(221,19779,105000,125 천원감가상각비총누적된초기투자자본장부가치

-

)(779,30221,19000,50 천원장부가치잔존가액손실처분이익

/

)(8.694,7)779,30()25.0( 천원손실처분이익한계세율처분세

/

정률법을 사용한 자산처분세 계산

23年 5月 3日 19IE of CSU. Kim, Gyutai

- 경우 1: 정액법을 이용한 현금흐름표 작성 ( 예제 4.3] 과 동일 )

- 경우 2: 정률법을 이용한 현금흐름표 작성

현금흐름표 작성

입력자료 MARR 15%감가상각방법 : 내용연수 8 년 정률법

상 환 기 간 : 5

년

세율 25%부채이자율 : 10%

상환방법 :

원리균등상환

손익계산서 　 0 1 2 3 4 5

　 매출액 　 100,000 100,000 100,000 100,000 100,000

　 비용 : 　 　 　 　 　 　

　 임금 　 20,000 20,000 20,000 20,000 20,000

　 원자재 　 12,000 12,000 12,000 12,000 12,000

　 제조간접비 　 8,000 8,000 8,000 8,000 8,000

　 감가상각비 　 39,043 26,848 18,462 12,695 8,730

　 부채이자 　 6,250 5,226 4,100 2,861 1,499

　 과세표준 　 14,708 27,926 37,438 44,444 49,771

　 법인세 (25%) 　 3,677 6,982 9,359 11,111 12,443

　 당기순이익 　 11,031 20,945 28,078 33,333 37,328

　 　 　 　 　 　 　 　

( 단위 : 천원 )

23年 5月 3日 20IE of CSU. Kim, Gyutai

현금흐름표 　 　 　 　 　 　 　

　 영업활동 : 　 　 　 　 　 　

　 당기순이익 　 11,031 20,945 28,078 33,333 37,328

　 감가상각비 　 39,037 26,846 18,462 12,696 8,731

　 투자활동 : 　 　 　 　 　 　

　 투자 (125,000)　 　 　 　 　

　 잔존가치 　 　 　 　 　 50,000

　 자산처분세 　 　 　 　 　 (7,695)

　 운전자본 (23,000)　 　 　 　 23,000

　 자본조달활동 : 　 　 　 　 　 　

　 융자액 62,500 　 　 　 　 　

　 원금상환 　 (10,237) (11,261) (12,626) (13,626) (14,988)

　 순현금흐름 (85,500) 39,831 36,530 33,914 32,403 96,376

NPV(15%)= 65,498.39

AW(15%)= 19,539

IRR= 40.1873%

현금흐름표 작성

( 단위 : 천원 )

23年 5月 3日 21IE of CSU. Kim, Gyutai

정액법과 정률법 비교

항목 정액법 정률법

NPV(15%) 62,538.5 65,498

AE(15%) 18,656 19,539

IRR 37.763% 40.187%

( 단위 : 천원 )

정액법과 정률법에 의한 경제성 평가지표 비교

감가상각법

정액법 정률법

연도 (P/F,15%,N) 감가상각비 현재가치 감가상각비 현재가치

1

2

3

4

5

0.8696

0.7561

0.6575

0.5718

0.4972

15,625

15,625

15,625

15,625

15,625

13,587.5

11,814.1

10,273.4

8,934.4

7,768.8

39,037

26,846

18,462

12,696

8,731

33,946.6

20,298.3

12,138.8

7,259.6

4,341.1

합계 78,125 52,378.2 105,772 77,984.4

정액법과 정률법에 의한 감가상각비의 현재가치( 단위 : 천원 )

23年 5月 3日 22IE of CSU. Kim, Gyutai

- 원칙 시간의 흐름에 비례하는 서비스 제공이 아닌 경우 각 연도별 감가상각비는 총 서비스량에 대한 실제 소모된 서비스량의 비율

- 공식 연간 감가상각액

예제 5.4] 생산량 비례법

조건 ] 취득가액 (I)=55,000( 천원 ), 총 서비스량 =250,000 킬로미터 , 금년도 사용한 총 서비스량 =30,000 킬로미터

풀이 ] 금년도 감가상각비

생산량비례법

)((잔존가액취득가액

서비스량총서비스량소모된일년동안 -

Dn

)(600,6)000,55(253)000,55(

000,250000,30 천원nD

23年 5月 3日 23IE of CSU. Kim, Gyutai

과세표준과 법인세

총매출액비용 : 매출원가 감가상각 운용비용과세표준법인세

당기순이익

항목

23年 5月 3日 24IE of CSU. Kim, Gyutai

- 현행 법인세율

- 2008 년도에 개정된 새로운 법인세율

법인세율

과세대상소득1 억원 이하1 억원 이상

세율13%25%

법인세 계산0 + 0.13( 과세대상소득 )1300 만원 + 0.25(1 억원 초과분 )

과세대상소득2 억원 이하2 억원 이상

세율10.20%

20%

법인세 계산0 + 0.102( 과세대상소득 )2,040 만원 + 0.25(2 억원 초과분 )

23年 5月 3日 25IE of CSU. Kim, Gyutai

- 한계세율 (marginal tax rate): 소득의 마지막 금액에 적용되는 세율

과세표준이 1 억원이하일 경우 , 13% 의 세율이 적용되어 한계세율이 13% 과세표준이 1 억원 초과할 경우 , 한계세율은 25%

- 실질 ( 평균 ) 세율 (effective tax rate)

ex) 어느 회사의 2008 년도 과세표준이 1 억 8 천만원이라면 , 법인세는

13,000+0.25(180,000-100,000)=33,000( 천원 )

이 세금을 과세표준으로 나누면 실질세율이 된다 . 33,000/180,000=18.3%

따라서 , 이 회사의 실질세율은 18.3% 로 회계기간 동안 창출된 과세표준 1,000 원당 183 원의 세

금이 지출되었다고 할 수 있다 .

영업소득에 관한 법인세

23年 5月 3日 26IE of CSU. Kim, Gyutai

예제 5.5] 법인세

조건 ] 올해의 총 매출액 : 1,250,000( 천원 ), 당해 연도 감가상각비 :58,000( 천원 ), 연간 임대료 :20,000( 천원 ), 운영비 : 840,000( 천원 )

풀이 ]

- 법인세 =13,000+0.25(332,000-100,000)=71,000( 천원 )

- 한계세율 =25% - 실질세율 = 71,000/332,000=21.39%

법인세 계산

총매출원가 1,250,000

운영비용 840,000

임대비용 20,000

감가상각액 58,000

과세표준 332,000

( 단위 : 천원 )

23年 5月 3日 27IE of CSU. Kim, Gyutai