Title: Fully Depreciated Assets (Definition, Examples) | How to Account?
Headings: Fully Depreciated Assets
Fully Depreciated Assets
What are Fully Depreciated Assets?
Accounting for Fully Depreciated Assets
1) If the Asset has been Fully Depreciated
2) If the Asset has been Sold
Examples of Fully Depreciated Assets
Example #1
Solution:
Example #2
Solution:
Conclusion
Recommended Articles

Content: The reason for such accounting is because the company continues to use the building for its business operations and would continue to generate benefits for the company in the long term. Unless the company capitalizes any further cost, which will improve the structure, no further depreciation would be allowed to be charged to the asset and will be reported in this manner only at each balance sheet reporting date. If the company plans to sell out the building at the current market value, the entire accumulated depreciation would be written-off against the building & the gain on the sale of assets will be credited to profit & loss a/c as “gain on sale of assets” thus inflating the current years profit by the gain amount. Post this sale; the building will not be reflected in the balance sheet since the same has been sold to a 3 rd party. Conclusion
Thus there are rules and procedures laid down by the accounting bodies of every country to follow the accounting treatment for the fully depreciable assets so that all the companies are comparable to each other. The auditor of the company is required to give an opinion on the true & fairness of the company along with whether all the accounting policies laid down by the statutory bodies are followed by the company or not. Recommended Articles
This has been a guide to what is Fully Depreciated Assets and its Definition. Here we discuss the accounting for fully depreciated assets and journal entries along with Examples. You can learn more about accounting from the following articles –
MACRS Depreciation
Depreciation Rate Calculation
Depreciation Tax Shield Calculation
Accelerated Depreciation Calculation
Reader Interactions