A delivery van that cost $45,000 with accumulated depreciation of $15,000 is sold for $20,000. $10,000 loss will be recognized on this sale.
The total recorded depreciation on an asset up to a certain date is known as accumulated depreciation. On the balance sheet, accumulated depreciation is shown immediately beneath the relevant capital asset line. An asset's carrying value is determined by subtracting accumulated depreciation from its historical cost.
For the following reasons, accumulated depreciation is categorized differently from standard asset and liability accounts: Since the balances in the account do not represent items that would provide economic worth for the entity over a number of reporting periods, it is not an asset.
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