Accumulated depreciation
Accumulated depreciation is the total depreciation charged on an asset to date, subject to adjustments such as disposal or revaluation. It is deducted from the gross amount when calculating carrying amount, alongside any applicable accumulated impairment. The annual depreciation expense affects profit or, where required, the cost of another asset.
Worked example
Equipment costing 10,000 with accumulated depreciation of 3,000 has a carrying amount of 7,000.
Common mistake
Treating accumulated depreciation as cash set aside to replace an asset.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | F2 | Supporting | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |