At the end of the fifth year, the accumulated depreciation
Under the first approach, to recognize the revaluation amounts for both PP&E and accumulated depreciation
such that the net value is increased by $8,571, the following computations are necessary: for the gross amount, $78,571 [+ or -] $70,000 x $120,000 = $134,693; for accumulated depreciation
, $78,571 [+ or -] $70,000 x $50,000 = $56,122.
The truck was fully depreciated by the year 20X6, so Accumulated Depreciation
contains the amount of the base ($12,000), and the truck had a book value of $3,000 (the salvage value).
A change in balance-sheet components--adding a new liability and capitalized retirement costs as part of the carrying cost of the long-lived asset, and removing accumulated depreciation
of retirement-related costs embedded there.
OF THE 53 UTILITIES EXAMINED THAT HAVE NUCLEAR facilities, 57% record decommissioning costs as part of depreciation expense with a corresponding entry to accumulated depreciation
Governments will need capital-asset records that support the opening balances at transition of capital assets and accumulated depreciation
and enable the calculation of depreciation for governmentwide reporting of general government capital assets.
Recording these amounts on the effective date of SFAS 143 results in an increase in the book value of assets of $2,303, which consists of the difference between capitalized retirement costs of $8,243 and an increase in accumulated depreciation
of $5,940, an increase in ARO of $74,386, and a negative cumulative effect of a change in accounting principle of $72,083.
That would result in the recognition of a liability adjusted for three years of cumulative interest, capitalization of an asset retirement cost that would be equal to the liability before being adjusted for cumulative interest, and three years of accumulated depreciation
on that cost.
If accumulated depreciation
on exhaustible capital assets has not been recorded, such amounts will need to be established retroactively.
Depreciation must be calculated for assets purchased in earlier years and adjusted for any accumulated depreciation
differences, when applicable.
In essence, this means that the amount of NDC recognized annually is reflected as depreciation expense with a corresponding credit to accumulated depreciation
rather than as a liability account.
1(h)(1)(B) and (h)(6) recapture the accumulated depreciation
to the extent of straight-line depreciation at a 25% rate; only gain in excess of the initial predepreciation basis will qualify for the new 20% long-term capital gains rate.