Depreciable amount
Depreciable amount is the amount allocated over an asset’s useful life through depreciation or amortisation. It is cost, or a revalued amount substituted for cost, less estimated residual value. Residual value reflects estimated disposal proceeds net of disposal costs for an asset already of the age and condition expected at the end of its useful life.
Worked example
A machine costs $30,000 and has a residual value of $3,000. Its depreciable amount is $27,000, giving $5,400 annually over five years on straight line.
Common mistake
Do not depreciate the residual value, or confuse the original depreciable amount with the carrying amount remaining after several years.
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 | F3 | Supporting | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| CIMA | F1 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |