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.

Real-world examples across industries

Manufacturing

A manufacturer's CNC machining centre cost £180,000 and is depreciated straight-line over 12 years, giving an annual charge of £15,000 — a debit to 8001 (Plant/Machinery Depreciation) and a credit to 0021 (accumulated depreciation, Plant and Machinery). The same site runs two delivery vans worth £22,000 each, depreciated over 5 years, adding an £8,800 annual charge: a debit to 8003 (Vehicle Depreciation) and a credit to 0051. Between the two, plant and vehicles usually dwarf every other depreciation line in a manufacturer's accounts.

Restaurant or retail fit-out

A restaurant's bespoke seating, bar fittings and shop fixtures cost £60,000 and are depreciated over 8 years — a shorter life than office furniture, reflecting heavier daily use and the likelihood of a refit sooner — giving a £7,500 annual charge: a debit to 8002 (Furniture/Fitting Depreciation) and a credit to 0041. The same business depreciates its till PCs and card machines, worth £2,000 in total, over 5 years for a modest £400 annual charge: a debit to 8004 (Office Equipment Depreciation) and a credit to 0031. The fit-out dwarfs the till kit, which is typical for hospitality and retail.

Small consultancy

A small consultancy with a modest asset base doesn't bother splitting depreciation across the specific codes — its accountant calculates £1,200 of total depreciation across all fixed assets at the year end and posts it as one figure, a debit to 8000 (Depreciation) and a matching credit spread across the relevant accumulated depreciation accounts. As the firm grows and issues each of its 15 staff a £900 laptop on a 3-year replacement cycle, £13,500 of laptops works out at £4,500 a year — enough to justify switching that portion to the specific 8004 code instead, debited there and credited to 0031, so management accounts show computer equipment separately from the rest.

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.