Accumulated depreciation

Accountants regard assets as resources that have not yet been used up. Assets are normally shown on the balance sheet at cost minus accumulated depreciation. In this sense, the depreciation charge for an accounting period is the means of converting a part of an asset into a current expenditure that is then listed as an expense in the income statement. 

Fixed assets are items that have a relatively long life such as land, buildings, and manufacturing equipment. The sum of these items is the total proper, plant, and equipment. From this total, accumulated depreciation is subtracted and the result is net property and equipment. Last, an item referred to as intangibles includes a variety of items such as patents, hcenses, intellectual capital, and goodwill. Intangibles are difficult to evaluate since they have no physicm existence e.g., goodwill is the value of the company s name and reputation. The sum of the total current assets, net proper, and intan tes is the total assets. 

Depreciation reserve is the accumulated depreciation at a specific time. 

Book value is the original investment minus the accumulated depreciation. 

Current assets Petty cash Cash in bank Accounts receivable Allow for doubtful accounts Inventory—prescription Inventory—other Prepaid federal income tax Prepaid state income tax Total current assets Noncurrent assets Automobiles Machinery equipment Office equipment Leasehold improvements Accumulated depreciation Total noncurrent assets Total assets... 

The cash flows involved m operating activities concern changes in the current asset and Hability accounts whereas investing relates to changes in fixed assets, except accumulated depreciation and financing activities involve changes in owner s equity accounts. 

The book value of an asset is the original cost paid minus the accumulated depreciation charged. The book value has no connection to the resale value or current market value of the asset ... 

Book value = initial cost accumulated depreciation... 

Property, plant, and equipment. This is listed at book value, i.e., cost less accumulated depreciation. The actual market value of these assets may be considerably higher ... 

Fixed Assets. A company s fixed assets include the land, buildings, manufacturing equipment, office equipment, automobiles, trucks, and so on that the company owns. These items are carried on the books at cost less the accumulated depreciation. Land value is entered at the same value year to year. The sum of these items is called net fixed assets. 

Properties, plants, and equipment Accumulated depreciation, depletion, and amortization Valuation of accounts and reserves Short-term borrowing... 

Fixed Assets Land Buildings Machinery Office Equipment Total Fixed Assets Less Accumulated Depreciation Net Fixed Assets Intangibles... 

Less accumulated depreciation Total fixed assets Total assets... 

Less accumulated depreciation Accounts for the gradual loss in value of various fixed assets. This amount is subtracted from the fixed assets subtotal. 

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