Hi I am an Science Graduate but joined a Manufacturing company as an account assistant. i have a question on depreciation. suppose i am calculating depreciation on a Machine for 5 years. After 5 years the asset value becomes zero. then how we have to treat this asset in Balance sheet. i have to pass an account entry etc... let me know if any one can answer this question clearly as i dont have any knowledge in accounts. please explain in details thank you sooo much
You still treat it as an asset with a value of its original purchase price and under accrued depreciation you show the same (full) amount again, effectively resulting in a zero balance for this item.
