How to record ROU asset depreciation
Recognition of depreciation expense for the Right-of-Use asset over the lease term.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Depreciation Expense - ROU Asset | Expense | 2,000.00 | - |
| Accumulated Depreciation - ROU Asset | Contra-Asset | - | 2,000.00 |
💡 Accountant's Note
The ROU asset is depreciated on a straight-line basis over the shorter of the lease term or the useful life of the asset.
Practitioner & Systems Framework
💻 ERP Architecture
Fixed Asset module should treat ROU assets as a separate asset class for specific reporting.
⚠️ Audit Flags
Depreciation period exceeding the non-cancellable lease term without justification.
📄 Required Documentation
Depreciation schedule mapping asset life to lease term.
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