Net PPE is calculated as which of the following?

Net PPE is calculated as which of the following?

• A. Gross PPE minus Accumulated Depreciation
• B. Gross PPE plus Depreciation
• C. Ending PPE minus Accumulated Depreciation
• D. Beginning PPE minus Capex

Answer: (A)

Net PPE represents the book value of property, plant, and equipment after depreciation. It is found by subtracting accumulated depreciation from the gross cost of PPE—the total original cost before depreciation. This difference shows how much of the asset’s value remains on the balance sheet. For example, with a gross PPE balance of 1,000,000 and accumulated depreciation of 200,000, net PPE would be 800,000. Adding depreciation would overstate the asset, ending PPE is typically already net (so subtracting accumulated depreciation again would double-count), and beginning PPE minus capex ignores new purchases that increase asset value.

Net PPE represents the book value of property, plant, and equipment after depreciation. It is found by subtracting accumulated depreciation from the gross cost of PPE—the total original cost before depreciation. This difference shows how much of the asset’s value remains on the balance sheet. For example, with a gross PPE balance of 1,000,000 and accumulated depreciation of 200,000, net PPE would be 800,000. Adding depreciation would overstate the asset, ending PPE is typically already net (so subtracting accumulated depreciation again would double-count), and beginning PPE minus capex ignores new purchases that increase asset value.