Carrying amount

Carrying amount is the value at which an asset or liability is recognised in the balance sheet after deducting accumulated depreciation, amortisation and impairment losses from cost; also called net book value.

ByHoang TruongUpdated July 2, 2026

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A machine bought for €120,000 has, after three years, accumulated depreciation of €36,000 and a €10,000 impairment loss, leaving a carrying amount of €74,000. Selling it later for €80,000 produces a €6,000 gain on disposal, since the sale proceeds exceed the carrying amount recorded on the balance sheet.

Where it fits

SubjectFinancial AccountingCoreTopicAsset Measurement & ValuationCore

The formula

LaTeX

\text{Carrying amount} = \text{Cost} - \text{Accumulated depreciation} - \text{Accumulated impairment losses}

Variables

$C$: Cost (original purchase price plus directly attributable acquisition costs) (€)
$A D$: Accumulated depreciation (total depreciation charged since acquisition) (€)
$A I$: Accumulated impairment losses (total impairment recognised since acquisition) (€)

Also called net book value; the figure shown on the balance sheet for the asset.

Check yourself

PracticeCORE

A company purchased a machine for €120,000. At the end of year three, accumulated straight-line depreciation totals €45,000. The company then recognises an impairment loss of €10,000 on the machine. What is the carrying amount of the machine immediately after the impairment is recognised?

Select an answer to check your understanding.