Prepare a schedule of non-current assets
Reconcile asset cost or valuation, accumulated depreciation, additions, disposals and closing carrying amounts for company notes.
Exam scope and assessment notes
Cambridge International AS & A Level Accounting 9706, 2026–2028 syllabus, Version 2. These original lessons map all five Topic 3.1 objectives: financial-statement purpose; partnership changes; clubs and societies; manufacturing accounts; and limited-company financial statements and notes. Practice is self-checked, not an official Cambridge grade. Full timed Papers 1–4 and human subject-teacher review remain outstanding.
Before you begin
- Use the Topic 1.5 adjustment and statement skills: apply accruals, distinguish capital from revenue, reconcile balances, and keep each entity's owners' funds separate from income and cash.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
An asset has cost $50,000 and accumulated depreciation $18,000. What is its carrying amount before any impairment?
What you will learn
- Prepare a non-current asset cost/valuation schedule
- Reconcile accumulated depreciation and disposals
- Calculate closing carrying amounts and link them to the statement of financial position
Reconcile gross cost or valuation
For each class of asset, start with opening cost or valuation, add purchases and capitalised additions, subtract the original cost/valuation of disposals and apply revaluations as required. The closing gross balance should reconcile to the supporting asset register and the relevant accounting policy.
An asset's disposal removes its gross carrying amount and related accumulated depreciation. Sale proceeds are recorded separately; the difference between proceeds and the asset's carrying amount produces a gain or loss on disposal, not a reason to leave the asset in the schedule.
Reconcile accumulated depreciation and carrying amount
Accumulated depreciation closing = opening accumulated depreciation − accumulated depreciation on disposals + current-period charge, subject to impairment or revaluation adjustments required. Net carrying amount = closing cost/valuation less closing accumulated depreciation and impairment.
Depreciation allocates an asset's depreciable amount over its useful life using the selected method and estimates. The schedule supports a note and the statement of financial position; it does not replace the expense entry in profit or loss or the relevant revaluation/impairment treatment.
Pause and explain
What must be removed from accumulated depreciation when an asset is disposed of?
Worked example
Equipment cost opening $120,000; additions $30,000; disposal at original cost $10,000. Accumulated depreciation opening $40,000; depreciation on disposed equipment $4,000; current charge $14,000. Calculate closing cost, accumulated depreciation and carrying amount.
Show the worked solution
- Closing cost = $120,000 + $30,000 − $10,000 = $140,000.
- Closing accumulated depreciation = $40,000 − $4,000 + $14,000 = $50,000.
- Closing carrying amount = $140,000 − $50,000 = $90,000.
Answer Closing cost $140,000; accumulated depreciation $50,000; carrying amount $90,000.
Try a topic test
Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
Opening asset cost $90,000; additions $25,000; disposal cost $8,000. Opening accumulated depreciation $27,000; depreciation on disposal $3,000; current charge $11,000. Find closing carrying amount.
Give me a hint
Calculate the cost and accumulated-depreciation reconciliations separately.
Compare my reasoning
- Closing cost = $90,000 + $25,000 − $8,000 = $107,000.
- Closing accumulated depreciation = $27,000 − $3,000 + $11,000 = $35,000.
- Closing carrying amount = $107,000 − $35,000 = $72,000.
Closing carrying amount is $72,000.
Look for these in your work
- Cost movement reconciled
- Disposed depreciation removed
- Net carrying amount calculated
A delivery vehicle costs $48,000, has accumulated depreciation $31,000 and impairment $2,000. Calculate its carrying amount. If sold for $14,000, calculate the gain or loss on disposal before costs.
Give me a hint
Calculate carrying amount first; compare proceeds with that amount.
Compare my reasoning
- Carrying amount = $48,000 − $31,000 − $2,000 = $15,000.
- Proceeds are $14,000, which are $1,000 below carrying amount.
- Loss on disposal = $1,000.
Carrying amount is $15,000 and disposal loss is $1,000 before transaction costs.
Look for these in your work
- Impairment deducted
- Proceeds compared to carrying amount
- Loss sign correct
An asset schedule balances, but the company has not removed depreciation on an asset sold partway through the year. Explain the likely effects and what records to check.
Give me a hint
Follow the disposed asset from cost and depreciation through the disposal calculation.
Compare my reasoning
- Accumulated depreciation may be overstated if the disposed asset's balance remains included.
- Closing carrying amount and the disposal gain/loss may be misstated.
- Check the asset register, disposal date, depreciation policy to that date, sale proceeds and disposal ledger entries.
Leaving the disposed asset's accumulated depreciation in the schedule can understate the disposal loss or distort carrying amounts. Remove the related balance and reconcile the disposal against the asset register and ledger.
Look for these in your work
- Accumulated depreciation effect identified
- Disposal result linked
- Records named
Common mistakes
- Removing disposal cost without removing its accumulated depreciation
- Subtracting depreciation twice from the closing carrying amount
What can you explain now?
How do you calculate the closing net carrying amount in a cost-model schedule?
Compare with the explanation
Closing cost less closing accumulated depreciation and impairment
The carrying amount is the remaining recognised amount after accumulated depreciation and impairment.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
Write the two roll-forward equations for closing cost and closing accumulated depreciation in a non-current asset schedule.
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.