Ads end in 20 seconds
This content is free thanks to our sponsors
Sponsored Ad – I may earn a commission if you click and buy
Accounting
Accumulated Depreciation
The total amount of depreciation expense that has been recorded against a fixed asset since the company bought it.
Accumulated Depreciation is a contra-asset account that sits right under the fixed asset it belongs to. It never goes negative and keeps growing until the asset is fully depreciated or sold.It's like the mileage on a car's odometer — it shows how much wear and tear the truck has already gone through.
Real world: A delivery van bought for $30,000 has $12,000 of accumulated depreciation after three years, so the net book value on the balance sheet is $18,000.
💡 Accumulated depreciation shows the true age and used-up value of your equipment without erasing the original purchase price.