# Chapter 9

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

1. ### KanishkaActive Member

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. ### KanishkaActive Member

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. ### KanishkaActive Member

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.