Enter the cost of the asset, salvage value, life of the asset, and the number of years owned to determine the accumulated depreciation.
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Accumulated Depreciation Formula
The following formula can be used to calculate an accumulated depreciation.
AD = (CA -SV) / LA * Y
- Where AD is the accumulated depreciation (%)
- CA is the cost of the asset
- SC is the salvage value of the asset
- LA is the life of the asset (years)
- Y is the current number of years owned
Accumulated Depreciation Definition
Accumulated depreciation is defined as the total depreciation seen on an asset after a given number of years.
Accumulated Depreciation Example
How to calculate accumulated depreciation?
- First, determine the cost of the asset.
For this example, we will say the cost of the asset was $100.00.
- Next, determine the salvage value.
For this example, the salvage value is found to be $50.00.
- Next, determine the lifetime in years.
This asset will last 10 years.
- Next, determine the number of years it’s been owned.
We will say it’s been owned for 2 years so far.
- Finally, calculate the accumulated depreciation.
Using the formula we find the accumulated depreciation to be (100-50)/10/*2 = $10.00.
Accumulated depreciation is the total amount of depreciation that an asset has undergone over a certain amount of years. Or in other words, how much depreciation has accumulated, hence the name.