Define Accumulated Depreciation And How many Option To Record Accumulated Depreciation in GLOWSIMS ?
Accumulated Depreciation represents the total depreciation expense that has been recorded for a fixed asset over its useful life. It is a contra-asset account that reduces the book value of the asset on the balance sheet, reflecting the wear and tear, obsolescence, or usage of the asset over time.
For example:
- An asset with a purchase cost of 50,000 PKR and an annual depreciation of 5,000 PKR will have an accumulated depreciation of 10,000 PKR after 2 years.
Options to Record Accumulated Depreciation
There are two options for recording depreciation:
- Single Depreciation: Add depreciation for a specific asset item.
- Collective Depreciation: Add depreciation for multiple items under the same asset group (Single or Collective group)