accumulated depreciation an asset 360

Accumulated depreciation on an asset refers to the total amount of depreciation that has been recorded against a fixed asset since it was acquired. Depreciation is the process of allocating the cost of an asset over its useful life, reflecting the asset's decrease in value due to factors like wear and tear, obsolescence, or aging. Accumulated depreciation is tracked on the balance sheet as a contra asset, reducing the asset’s book value. This helps provide a more accurate representation of the asset’s current worth, while also allowing businesses to account for the gradual expense of using the asset over time