accrued depreciation


Also found in: Acronyms, Encyclopedia.

Accumulated Depreciation

The total depreciation on an asset, and not simply the depreciation that is added each year. One may calculate the accumulated depreciation by subtracting the original value of the asset from its current book value or by multiplying the yearly depreciation by the number of years the asset has been held.

accrued depreciation

The total depreciation claimed, to date, on a property. It is an entry on the balance sheet and is supposed to properly reflect that the property is becoming less valuable with the passage of time.Realistically,in the case of real estate,the property is usually becoming more valuable each year.As a result,you may have a book value of $200,000 but a fair market value of $2,000,000.

References in periodicals archive ?
The breakdown method of measuring accrued depreciation typically lists the causes in the following order: curable physical depreciation, incurable physical depreciation, curable functional obsolescence, incurable functional obsolescence, and external obsolescence.
Redefining some cost approach terms for clarification will help explain why the order of the deductions for accrued depreciation needs to be rearranged.
The age/life methods appear most reliable when used to differentiate physical depreciation from the total accrued depreciation derived through the extraction method.
When the total accrued depreciation is subtracted from the cost estimate new, the resulting figure is the depreciated value of the improvements.