Depreciation accounting

Fixing Depreciation Accounting

Accumulated provisions for depreciation belong on the right side of the balance sheet.

The time has come to revisit where the accumulated provision for depreciation belongs. Utilities objected—some 50 years ago—when it was moved from the right side of the balance sheet to the left side, with good reason. Consistency, comparability, reliability and relevance all demand an end to this strange accounting practice.