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How do I explain in plain English item:
2025 Accumulated Depreciation?
Dont want to scare off anyone with a technical explanation, since it comes out on negative numbers.
Thanks.
Solved! Go to Solution.
Try this:
Accumulated Depreciaton is not an expense. It is Fixed Asset. It is the sum total of Depreciation expense taken over time as a reduction in current value of Fixed Assets. It is applied on the balance sheet against the positive values of the corresponding Fixed Assets subject to depreciation
Fixed Assets, in the normal course of business, cannot be straight expensed but must be depreciated, and the depreciation expense taken over the projected life of the asset (based on IRS tables). The annual depreciation charge is an expense, but it is offset by a decrease in present value of Fixed Assets and thus lands in Accumulated Depreciation
From time to time accelerated depreciation is allowed which speeds up the depreciation process and does allow current year full or bonus depreciation, but that bonus depreciation expense still adds negatively to Accumulated Depreciation
Try this:
Accumulated Depreciaton is not an expense. It is Fixed Asset. It is the sum total of Depreciation expense taken over time as a reduction in current value of Fixed Assets. It is applied on the balance sheet against the positive values of the corresponding Fixed Assets subject to depreciation
Fixed Assets, in the normal course of business, cannot be straight expensed but must be depreciated, and the depreciation expense taken over the projected life of the asset (based on IRS tables). The annual depreciation charge is an expense, but it is offset by a decrease in present value of Fixed Assets and thus lands in Accumulated Depreciation
From time to time accelerated depreciation is allowed which speeds up the depreciation process and does allow current year full or bonus depreciation, but that bonus depreciation expense still adds negatively to Accumulated Depreciation
Thank you for such a great and substantial response.
My only fear now is - How do I explain this in lame terms?
Thank You.
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