Depreciation Charges Explained: Codes 8000, 8001, 8002, 8003 & 8004

Every fixed asset loses value over time, and this block of codes is where that loss shows up as an expense each year — the counterpart to the accumulated depreciation contra-asset codes sitting back in Fixed Assets.

The codes, and what each one holds

Code 8000 — Depreciation records the overall depreciation charge for the period across all fixed assets, where a business doesn't split it by asset type.

Code 8001 — Plant/Machinery Depreciation, 8002 — Furniture/Fitting Depreciation, 8003 — Vehicle Depreciation and 8004 — Office Equipment Depreciation each record the annual depreciation charge for that specific type of asset, matched by a credit to the corresponding accumulated depreciation code in Fixed Assets (codes 0021, 0041, 0051 and 0031 respectively). All five are Overheads & Depreciation codes and normally carry a debit balance.

A worked example

Say a business owns a £20,000 delivery van, depreciated straight-line over 5 years with no residual value, giving an annual charge of £4,000.

Vehicle Depreciation (code 8003): £4,000 debited as this year's expense in the profit and loss account.

Motor Vehicles Depreciation (code 0051): £4,000 credited, increasing accumulated depreciation and reducing the van's net book value on the balance sheet to £16,000.

Why this matters day to day

Splitting depreciation by asset type makes it easier to see which category of asset is consuming the most value each year, useful when planning replacement cycles or capital budgets. Getting the depreciation policy right — the useful life and method chosen for each asset class — also has a real effect on reported profit, so it's one of the estimates an accountant will typically review closely at year end.