What is prior depreciation?
Prior depreciation is the amount of depreciation that should have been recorded for an asset in previous accounting periods before the current year. It represents depreciation that accumulated over time before the asset was added to the system or before depreciation records were corrected.
For example, a city purchased a fire truck for $300,000 in 2021 with a useful life of 10 years. However, the asset was not added into Caselle Asset Management until 2024.
When the asset is entered into the system, the organization would record prior depreciation for the years 2021–2023 to reflect the depreciation that should have already occurred. If annual depreciation is $30,000 per year, the prior depreciation amount would be $90,000 for those three years.
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