What is Depreciable amount?
The part of a fixed asset that is charged to expenses through depreciation over its useful life. Under NAS No. 5 it is found by deducting the residual value from the initial cost (or another amount substituted for it in the financial statements). The logic is simple: the amount recovered at the end of the period by selling or scrapping the asset is not written off to expenses. If the initial cost of the asset was later increased by capital expenditure, the calculation starts differently: the residual (carrying) amount on the day the works were completed and the asset was put back into operation is taken, and the residual value is deducted from it. Depreciation continues until this amount is fully recovered or the asset is derecognised.
Source: 5-son BHMS, 3-band; 5-son BHMS, 32–34-bandlar; 5-son BHMS, 39-band