what is accumulated depreciation account

An accumulated depreciation account is a contra asset account used to track the total depreciation on a company's fixed assets over time. It reduces the book value of assets like machinery, vehicles, and equipment on the balance sheet, reflecting their decreasing value due to wear and tear or obsolescence. While accumulated depreciation doesn’t represent an actual out-of-pocket expense, it helps businesses accurately reflect the net value of their assets for financial reporting and tax purposes