what's accumulated depreciation

Accumulated depreciation refers to the total amount of depreciation that has been recorded against a fixed asset since it was acquired. This accounting concept reflects the decrease in an asset's value over time due to factors like wear and tear, aging, or obsolescence. Accumulated depreciation is recorded as a contra asset account on the balance sheet, which reduces the asset’s book value. It helps businesses allocate the cost of long-term assets over their useful lives and ensures that financial statements provide an accurate representation of the asset's current value.