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Non-current assets: Acquisition and depreciation

3.5 Accounting for depreciation

Whichever method of depreciation is used, the accounting entries required are the
same.

The correct double entry to record the depreciation charge is:

 Debit Depreciation expense account

 Credit Accumulated depreciation account

 The depreciation expense account is a statement of profit or loss account and
therefore is not cumulative.

 The accumulated depreciation account is a statement of financial position
account and as the name suggest is cumulative i.e. reflects all depreciation
charged to date.

Illustrations and further practice

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