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What is the meaning of negative depreciation?

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Answered 2012-05-10 05:30:51

Negative depreciation, on the other hand, accounts for the opposite process of an asset gaining value over time.

Increases in ValueSome assets do not decrease in value over time, so normal depreciation does not apply. If a business owns an asset that lasts more than one year and goes up in value, it can account for the appreciation using the negative depreciation method. In contrast with depreciation, negative depreciation adds value over time. For example, if an asset goes up in value by $1,000 every year, then a negative depreciation of the same amount every year would adjust the recorded value of the asset. ExamplesAssets that could go up in value include artwork, such as paintings and sculptures. An asset may also increase in value due to importation and currency exchange rate fluctuations. For example. if the importing country's currency drops in value relative to the exporting country's currency, the asset value increases. The importer would then record the asset value at cost and add negative depreciation to increase its recorded value.
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What is the double effect of depreciation?

When allocating depreciation, the two accounts affected will be an expense account - depreciation and a negative asset/contra-asset - accumulated depreciation. The journal entry would be: Dr Depreciation xxxx Cr Accumulated Depreciation xxxx This effectively raises the expense and decreases your asset. In the general ledger the depreciation account will be debited and the accumulated depreciation will be credited.

Does accrued depriciation go in asset non current where you subtract?

Accumulated Depreciation is a contra-account, meaning it is shown as a negative, in the Fixed Asset section of the Balance Sheet.

What is depreciation in terms of accounts?

Nominal Account- (Negative) Equity Element

What is the Meaning of depreciation?

(n.) A lessening in value; a belittling.

Can common stock have a negative balance?

is the opening balances of accumulated depreciation in a balance sheet

How are accumulated depreciation and depreciation expensese related?

Accumulated depreciation and depreciation are related with each other as depreciation is annual expense while accumulated depreciation is the sum of all annual depreciation expenses.

What is the meaning for negative for provocable myocardial ischemia?

what is the meaning of negative for provocable ischemia

What is difference between accumulated depreciation and provision for depreciation?

Accumulated depreciation shows the depreciation for specific asset which is already charged while provision of depreciation is created to charge depreciation before actual depreciation is occur.

What is the Difference between accumulated depreciation and depreciation expenses?

Accumulated depreciation is all of the depreciation ever 'accumulated' against the assets currently in service. It is shown on the balance sheet as a 'contra' (negative) asset, directly below the assets it relates to. Depreciation expense is the current period's depreciation of the assets currently in service. It is shown on the income (P&L) statement as an expense. Example: Business purchased a truck for $20,000 which will last 5 years. For simplicity, we'll use 'straight-line' depreciation. End of Year One: Depreciation expense on Income Statement $4,000 (1/5th of $20,000) Accumulated Depreciation on balance sheet: $4,000 End of Year Two: Depreciation expense on Income Statement $4,000 Accumulated Depreciation on balance sheet: $8,000 (both years) End of Year Three: Depreciation expense on Income Statement $4,000 Accumulated Depreciation on balance sheet: $12,000 (all three years)

Why accumulated depreciation exceed depreciation expense?

Depreciation expenses is for one specific fiscal year while accumulated depreciation is the sum of all depreciation expenses that’s why accumulated depreciation exceeds the depreciation if there is depreciation expense in prior year as well.

Distinguish between depreciation policy and the concept of depreciation?

Depreciation policy is management thing that what depreciation method to use and how much depreciation to charge to each asset. Depreciation concepts are concepts which govern the depreciation process which management cannot change they are universal rules to follow depreciation that how straight line depreciation work etc.

What is EBIDAT?

Earnings before interest and depreciation after taxes # I don't believe this person's answer is correct - after a long search I found the following meaning "Earnings Before Interest, Depreciation, Amortisation >And< Tax" #

How do you record annual depreciation and accumulated depreciation?

[Debit] Depreciation expense[Credit] Accumulated depreciationAfter that depreciation is shown as part of income statement while accumulated depreciation goes to balance sheet.

What is the entry for accumulated depreciation?

Debit depreciation accountCredit accumulated depreciation

What is the difference between depreciation and accumulated depreciation?

Depreciation is for a particular year (say for Year 3). Accumulated depreciation is the aggregate of depreciation from the beginning (say from Year 1 to Year 3)

Can you put the word depreciation in a sentence?

Every thing will have depreciation . depreciation is rule of nature.

What is accumulated depreciation?

The accumulated deprecation is the all the depreciation amounts should be the accumulated depreciation.

What is the journal entry accumulated depreciation?

[Debit] Depreciation account [Credit] Accumulated depreciation

What is the meaning of negative?

not positive

What is an antonym for depreciation?

Appreciation is an antonym for depreciation.

What are the types of depreciation?

There are three types of depreciation. Fixed Installment, Diminishing balance and Component Depreciation.

Is it customary for the depreciation expense account and the accumulated depreciation account to be equal?

No. Accumulated depreciation is depreciation accumulated every year and it will only increase and won't decrease. Depreciation expenses is incurred every year.

Accumulated depreciation and depreciation expense?

Using accumulated depreciation and depreciation expense is a way that businesses can realize the true value of assets. A piece of equipment, for example, is devalued every year by the process of amortizing the asset. This in turn is recorded as depreciation and depreciation expense.

What is provision for depreciation?

Provision of depreciation account is the account of provision of depreciation.First of all we should understand provision of depreciation .Provision of depreciation is the collected value of all depreciation. With making of this account we are not credited depreciation in asset account. But transfer every year depreciation to provision of depreciation account. Every year we adopt this procedure and when assets are sold we will transfer sold assets 'total depreciation to credit side of asset account. For calculating correct profit or loss on fixed asset. This provision uses with any method of calculating depreciation.

Is depreciation an asset liability or equity?

no Depreciation Expense is an expense on your Statement of Comprehensive Income (Profit and Loss Account) The depreciation expense in the year would then reduce the value of the asset to which the depreciation relates. If you have any further questions on this topic, please do not hesitate to contact me at -------------------------------------------- With Regards to the Accounting Equation. Equity (NAV)= Assets- Liabilities Depreciation would be considered negative equity (as are all expenses) as they represent a decrease in the net asset value- or NAV- (not through transaction with the entities owner)

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