Carrying amount is a reporting-system output at a date, not a synonym for price. For Beacon's delivery vehicle immediately before sale:
$50,000 gross cost − $35,000 accumulated depreciation
= $15,000 carrying amount
The $15,000 becomes an input to the disposal analysis. It does not predict the cash buyer will pay, and it does not become the gain. If cash proceeds are $18,000 and no disposal costs apply, the $3,000 excess over carrying amount is the gain.
ASC 360-10-35-17 uses the carrying amount of the tested asset group in both the recoverability screen and any later loss measurement. This paragraph supports that impairment use. It does not define one calculation for every asset or liability.
Preserve the measurement bridge
“Book value” can sound like an intrinsic fact about an asset. A better control is to retain the bridge from gross amount through every cumulative adjustment, with entity, unit, date, asset identity, and governing measurement basis. That bridge makes revisions and derecognition auditable and prevents a net export from silently losing its components.
Finance interpretation
A gap between carrying amount and sale price can reflect historical cost, estimate choices, elapsed allocation, market conditions, asset condition, or transaction facts. One sale does not establish a current value for every remaining asset. Analysts should reconcile gross balances, accumulated depreciation, additions, disposals, impairments, and other changes before drawing asset-age or capital-intensity conclusions.
Boundary
The exact derivation depends on the asset, measurement model, and adjustments. This module uses depreciable tangible assets. It does not generalize the cost-minus-accumulated-depreciation pattern to every asset or liability.
Put the concept to work
Understand this concept
- Explain carrying amount as a date-specific reported amount derived after applicable cumulative adjustments rather than as an automatic market price.
Analyze this concept
- Analyze carrying amount as the starting point for a bounded estimate revision, disposal gain or loss, or impairment test without relabeling it as market value.
Learning resources
Choose a lesson, try an application, or inspect the sources behind this concept.
Build on these ideas
- Accumulated depreciation — Analyze
To analyze this concept: Required. A supported gross-to-contra rollforward establishes the amount at the revision, sale, or testing date.
- Accumulated depreciation — Understand
To understand this concept: Required. A depreciable-asset example derives its net amount from gross cost and a linked cumulative contra balance.
- Asset — Understand
To understand this concept: Required. The learner must identify the recognized resource before interpreting the amount attached to it.
Show 1 more prerequisites
- Carrying amount — Understand
To analyze this concept: Required. The net amount must be computed and labeled correctly before it enters a later measurement or derecognition analysis.
Lessons
Worked examples and cases
Practice
Common mistaken ideas
Sources
Standard references
More specific topics
Related concepts
Show 21 more related concepts
- Asset
- Asset acquisition cost
- Asset disposal
- Change in accounting estimate
- Contra account
- Debt reacquisition price
- Finite-lived intangible asset
- Gain or loss on disposal
- Intangible asset amortization
- Intangible asset rollforward
- Involuntary conversion
- Long-lived asset impairment
- Lump-sum asset acquisition
- Nonmonetary asset exchange
- Property, plant, and equipment rollforward
- Recoverability test
- Salvage value
- Self-constructed asset
- Subsequent measurement
- Sunk cost
- Technological feasibility
Use this idea next
- Asset disposal — Understand
Required level here: analyze. Required. Derecognition requires a supported amount for the asset immediately before the disposition.
- Carrying amount — Analyze
Required level here: understand. Required. The net amount must be computed and labeled correctly before it enters a later measurement or derecognition analysis.
- Change in accounting estimate — Apply
Required level here: analyze. Required. The remaining allocation begins with the supported carrying amount at the revision date.
Show 7 more next steps
- Debt reacquisition price — Apply
Required level here: understand. Required. Extinguishment compares consideration with the liability's net carrying amount.
- Gain or loss on disposal — Understand
Required level here: understand. Required. The residual income effect cannot be derived until the derecognized net amount is known.
- Intangible asset rollforward — Analyze
Required level here: analyze. Required. The learner must distinguish gross amount, accumulated allocation, impairment, and net carrying amount.
- Long-lived asset impairment — Understand
Required level here: analyze. Required. The test and measurement begin with a supported carrying amount for the correctly identified asset group.
- Property, plant, and equipment rollforward — Analyze
Required level here: analyze. Required. Net PP&E must reconcile to gross cost less accumulated contra amounts at both endpoints.
- Recoverability test — Understand
Required level here: analyze. Required. The screen requires the correctly scoped carrying amount for the asset group at the testing date.
- Subsequent measurement — Understand
Required level here: understand. Helpful. The learner should identify the amount reported before applying a later adjustment or test.
Used in these readings
These chapters explain or apply this concept. The label states how the chapter uses it.