The amount assigned to an asset (asset account) that is subject to depreciation since its acquirement and over the course of its useful life.Typically, it is the asset’s historical cost (original cost) or other measurement value at which the asset is recorded in the financial statements of an entity, less its estimated residual value.

The basis for depreciation is the amount which is used as basis for computation of depreciation of an asset:

Basis for depreciation = capitalized costs – residual value

The cost of the asset less all related depreciation written off (to date) (i.e., accumulated depreciation) is known as the carrying value of the asset.

The basis for depreciation is also referred to as a depreciable amount or a depreciable cost.