Depreciable amount is defined as?

Depreciable amount is defined as?

• A. Cost less any estimated residual value
• B. Cost plus residual value
• C. Replacement cost
• D. Carrying amount at end of period

Answer: (A)

Depreciable amount is the portion of an asset’s cost that will be allocated to depreciation over its useful life. It is calculated as cost minus the estimated residual (salvage) value. The residual value is what you expect to recover when the asset is disposed, so it isn’t depreciated. Depreciation then spreads this depreciable amount over the asset’s useful life. The carrying amount at the end of the period is the cost minus accumulated depreciation, not the depreciable amount. Replacement cost isn’t used in this calculation, as it reflects current replacement value rather than the allocation of cost over time.

Depreciable amount is the portion of an asset’s cost that will be allocated to depreciation over its useful life. It is calculated as cost minus the estimated residual (salvage) value. The residual value is what you expect to recover when the asset is disposed, so it isn’t depreciated. Depreciation then spreads this depreciable amount over the asset’s useful life. The carrying amount at the end of the period is the cost minus accumulated depreciation, not the depreciable amount. Replacement cost isn’t used in this calculation, as it reflects current replacement value rather than the allocation of cost over time.