Banking

OREO (Foreclosed Property) — Monthly Depreciation

Recording depreciation on a commercial building held as Other Real Estate Owned.

Account NameTypeDebit ($)Credit ($)
OREO Depreciation ExpenseExpense (+)2,000.00-
Accumulated Depreciation (OREO)Contra-Asset (+)-2,000.00

💡 Accountant's Note

OREO is carried at the lower of cost or fair value less costs to sell. Depreciable buildings continue to depreciate until disposal. Regulators typically require banks to dispose of OREO within a defined period (2-3 years in Jordan).

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