Abstract

The dispute over tuitions in universities spurred quite a little interest among university administrators and students about the depreciation policy of private universities. For the depreciation cost of the material assets like educational buildings and facilities is an important part of educational cost to make it a persuasive base for tuition calculation. There has been hardly any research that dealt with the depreciation policy of private universities so far and some researches done have been seeing it as a part of their research on private university accounting. And these are focused on why private universities have to apply depreciation. Regarding this, there seems a consensus that private universities have to apply depreciation in their accounting. Yet, there is little discussion on how they deal with the depreciation cost in their accounting . This study looks into the concrete process of depreciation when they decide to do so based on the proposed revision special rules and proposals for new university accounting standards. To do so, the paper analyzes related problems. To sum up the analysis：First, the accounting process that matches the fixed asset and the endowment fund necessarily creates various endowment substitutes and operational difference substitutes to cause the distortion of accounting information and reduce the readability of it. The accounting process for these items is directly connected to the accounting process of depreciation. The new accounting process that takes a new way of processing depreciation cost can be done first with the abolishment of the article 25 of the special rules. This means a transition from the Japanese accounting style to the American accounting style. Second, upon abolishing the article 25 of the special rules, one should revise the endowment fund item registered in the previous balance sheet in relation to the accounting process that matches the fixed asset amount and the endowment fund. That is, one has to convert the previous period operation cost difference adjustment to the operation cost substitute which is the depreciation of the fixed assets with depreciation or the sales of fixed assets after one substitute the endowment item with other endowment time of the previous period operation cost difference adjustment. Third, regarding the beginning point of the depreciation policy, it should be by principle applied to the fixed assets with depreciation acquired after the beginning of the new accounting standards. Yet, for the assets that have partially or fully passed the durable years, it should be retroactively applied as an exception. Fourth, the new item regarding the depreciation cost of the fixed assets that have partially or fully passed the durable years should appear as the following. If the normal depreciation had conducted for the material assets acquired before the new accounting, the result of this kind of accounting would be reflected on the new balance sheet like this. (The debit side) Previous operation cost difference adjustment ×××/ (The credit side) Accumulative depreciation costs ×××. Fifth, The article of revaluation in the special rules must be aboished.

Keywords

• characteristics of the depreciation
• endowment substitutes
• operational difference substitutes
• endowment fund
• the durable years

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