How to Record Property Depreciation
Recognition of the systematic allocation of the cost of a building over its useful life.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Depreciation Expense | Expense | 12,000.00 | - |
| Accumulated Depreciation | Contra-Asset | - | 12,000.00 |
💡 Accountant's Note
This entry records the annual depreciation expense for a rental property to match the cost of the asset against the revenue it generates.
Practitioner & Systems Framework
💻 ERP Architecture
Set up a recurring journal entry in the Fixed Assets module linked to the appropriate property cost center.
⚠️ Audit Flags
Discrepancies between the fixed asset schedule and the general ledger accumulated depreciation balance.
📄 Required Documentation
Depreciation schedule showing asset cost, salvage value, and useful life calculation (e.g., 27.5 years for residential).
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