What Causes Accumulated Depreciation To Decrease

There is reduction in the value of Accumulated Depreciation in case of Disposal of Depreciating Assets as these are sold due to obsolescence, changer in technology, etc. As the estimated Useful Life of these Kinds / Types of Assets decreases so there is decline in the value of Accumulated Depreciation of Assets sold in the market.

As these assets are sold, so we don’t need to record below Accounting Journal Entry for such assets:

 Depreciation Expense a/c - Depreciating Assets  XXX

 

                                                                               Accumulated Depreciation a/c  XXX

Also, as the Accumulated Depreciation is the total of Depreciation charged to expense every accounting year, so now there is no need to calculate depreciation for such depreciating assets as these are sold in the market. So, Ultimately Accumulated depreciation also decreases with the decrease of Depreciation charged every year.