Definition of Fully Depreciated Asset
A fully depreciated asset is a depreciable asset for which no additional depreciation expense will be recorded. In other words, the asset's accumulated depreciation is equal to the asset's cost (or to its estimated salvage value).
Example of Reporting a Fully Depreciated Asset on the Balance Sheet
A fully depreciated asset that continues to be used is reported at its cost in the Property, Plant and Equipment section of the balance sheet.
The asset's accumulated depreciation continues to be included in the total accumulated depreciation amount that appears as a subtraction or negative amount in the Property, Plant and Equipment section.
The cost and accumulated depreciation will continue to be reported on the balance sheet until the asset is no longer in use. This usually occurs when the company sells or retires the asset.
Fully depreciated assets and their resulting book value of zero (or its salvage value) reinforces accountants' position that depreciation is a process for allocating an asset's cost to expense; it is not a process for valuing the asset.