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Property, plant, and equipment are stated at cost less accumulated depreciation.
A company buys an asset for $5,000 that has a five-year lifespan and zero salvage value. The company uses straight-line depreciation, and the asset depreciates at a rate of $1,000 per year.
In year one, depreciation will be $1,000, as will accumulated depreciation, and carrying value of the asset will be $4,000.
In year two, depreciation will be $1,000, accumulated depreciation will be $2,000 ($1,000 from the current year + $1,000 accumulated from previous years) and carrying value will be $3,000.
Each subsequent year will follow the same process.
нагромаджена амортизація; нарахована амортизація; амортизаційний фонд; зношення; нараховане зношення