Hello. This may sound wierd but how can one appreciate the value of an asset?
We mostly deal with transportation vehicles, and every year they depreciate in cost since it is a law here to take them annually to a valuation company to get a value for insurance purposes. but at times we have one or two taken back to a garage/company and they are restored or built afresh, which is a very expensive undertaking and what it does is that it makes the vehicle appreciates in value…
2017 - buy used car at $10,000
2018 - value depreciates by $2000
2019 - value depreciates by $2000
2020 - value depreciates by $2000
2020 - book value of car $4000
2020 - car restoration cost of $5000
(at this point can we say the vehicle is worth $9000?)
While we record the depreciation and it shows in our balance sheet, how do we record appreciation? Can we even call it appreciation? I have tried deleting an entry in the depreciation but i want to see all the entries and history. We also tried creating an account for depreciation but we don’t want it to show up in our P&L, rather an add on to an asset but not a separate asset altogether.
Don’t know if i am making sense.
Is this possible?