# Chapter 9

Discussion in 'CT2' started by Kanishka, Aug 19, 2018.

1. Why do disposals represent a negative in the depreciation calculation table?

2. ### Colin McKeeActEd TutorStaff Member

Tangible assets are held in the books at "original cost less accumulated depreciation". So a building might be held at £500k - 150k = 350k book value. If that building is sold, the original cost is removed from the trial balance, and the accumulated depreciation is also removed from the accounts. This represents a negative in the depreciation table.

3. Thank you for clarifying.

I have another doubt. In the statement of financial position for a particular year, do we subtract the accumulated depreciation from the asset or only the depreciation for that particular year?

4. ### Colin McKeeActEd TutorStaff Member

The asset is valued at original cost less accumulated depreciation for all previous years.

5. But the depreciation for previous year would have already been deducted. So why would we subtract it again this year?

6. ### Colin McKeeActEd TutorStaff Member

We dont subtract it again. I am not sure what your question is here - perhaps it would be better if you could put some numbers together as to how you see the depreciation building up against a tangible asset, and how it disappears when the asset is sold. Then I can see where your problem lies.