Accumulated Depreciation

What is Accumulated Depreciation?

Accumulated depreciation is the total amount of depreciation expense that has been recorded against a company’s fixed assets (like equipment or buildings) since they were acquired. It shows how much of an asset’s value has been used up over time and is subtracted from the asset’s original cost on the balance sheet to calculate its current book value.

Example: If a machine costs $10,000 and $4,000 has been depreciated, the accumulated depreciation is $4,000, and the net value is $6,000.