Explore commonly used personal finance terms.
Accumulated depreciation is the total depreciation expense that has been charged on an asset since its acquisition. This figure appears on the balance sheet as a deduction from the asset’s historical cost, showing the net book value. Accumulated depreciation reflects the asset’s wear and tear, reducing its value over time. Tracking accumulated depreciation helps businesses understand the remaining useful life of assets and assess replacement needs for capital equipment and other depreciable assets.
