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Accumulated depreciation

kannan (jobless) (263 Points)

16 September 2015

can anyone explain about journal of accumulated depreciation and it's applicability in cash flow statement I m so confused about this concept

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3 Replies

Shobhit Jain (CA) (4892 Points)
Replied 17 September 2015

U can see Parveen Sharma Sir's lecture on YouTube on AS-3.Ur all doubts will he cleared.

CA-AK (CA) (600 Points)
Replied 17 September 2015

Accumulated Depreciation is the total depreciation charged till date. It is shown in balance sheet by deduction from the cost of Asset.

Regarding Cash Flow- Only depreciation for the year shall be adjusted in operating activities. No treatment of accumulated Depreciation.

Kaushik Sekar (Article Assistant) (66 Points)
Replied 23 September 2015

Accumulated Depreciation, as the name suggests, is the total depreciation calculated with respect to a particular asset till date, from the date of its purchase. Depreciation charged every year is transferred to the accumulated depreciation account.

Dr. Depreciation A/c

Cr. Accumulated Depreciation A/c

Accumulated depreciation has no impact on the cash flow statement. Only the depreciation calculated for the year is added back under 'Cash flow from Operating Actvities'.