Example

Let us take a look at posting a depreciated amount after impairment - follow-up to the example from topic 5 - Downward reval. on downward rev. accounts.

As of August 31st, 2007, besides cost and adjustment the acquistion accounts show impaired cost and impaired adjustment. A 20% depreciation rate is applied.

Depreciating from the period from September 1st, 2007 to December 31st, 2007, depreciates cost (see 21 - Depreciation on acquisition accounts) which in turn represents expense, plus, it depreciates impaired amount which in turn represents reversed depreciated cost.

Calculate depreciation using a specially designed report where updated values are added to acquisition and impairment accounts. Below you can see the Fixed Assets register after confirming report:

Lines of journal entry that are created using automatic posting of depreciation report include depreciated cost on the depreciation expense account (432D/0500C). In addition they include depreciation of impaired amount (0502D/432D reversal):