Question:
How is Net Block calculated?
How is Net Block calculated?
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$\text{Gross Block}$ is the purchase price of assets, while $\text{Net Block}$ is their current book value after subtracting accumulated depreciation.
Updated On: Jun 22, 2026
- Gross Block + Capital work in progress
- Gross Block - Depreciation
- Gross Block - Net worth
- Depreciation + Loan funds
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The Correct Option is B
Solution and Explanation
Step 1: Understanding Fixed Asset Accounting:
A company's fixed assets (such as plant, property, and equipment) are recorded using two primary metrics: Gross Block and Net Block.
Step 2: Defining Gross Block and Depreciation:
• Gross Block: The original cost of acquiring the fixed assets.
• Accumulated Depreciation: The total depreciation expense charged against those assets over time to reflect wear and tear.
Step 3: Calculating Net Book Value:
Net Block represents the remaining book value of the assets. It is calculated by subtracting accumulated depreciation from the gross acquisition cost: $$\text{Net Block} = \text{Gross Block} - \text{Depreciation (B)}$$
A company's fixed assets (such as plant, property, and equipment) are recorded using two primary metrics: Gross Block and Net Block.
Step 2: Defining Gross Block and Depreciation:
• Gross Block: The original cost of acquiring the fixed assets.
• Accumulated Depreciation: The total depreciation expense charged against those assets over time to reflect wear and tear.
Step 3: Calculating Net Book Value:
Net Block represents the remaining book value of the assets. It is calculated by subtracting accumulated depreciation from the gross acquisition cost: $$\text{Net Block} = \text{Gross Block} - \text{Depreciation (B)}$$
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