is depreciation a sunk cost
2. An example of sunk costs in accounting is the book value of existing assets such as fixed assets (e.g., machinery, equipment), inventory, investments, etc. Depreciation, amortization, and impairments also represent sunk costs.he equipment is worth zero. The remaining book value is $2,000 (i.e., $10,000 8 x $1,000). Asset write down (i.e., loss) represents a sunk cost. Even if the company continued using the equipment for the next two years, the remaining $2,000 would still need to be written off as a depreciation expense.