what's accumulated depreciation

Accumulated depreciation refers to the total amount of depreciation expense that has been recorded against a company's fixed assets over time. Depreciation is the process of allocating the cost of a long-term asset, like equipment or buildings, over its useful life. As assets lose value due to wear and tear or obsolescence, accumulated depreciation tracks that decrease in value. This amount is subtracted from the asset’s original cost on the balance sheet, reflecting the asset’s book value. Accumulated depreciation helps businesses accurately report asset values and manage their finances for tax and accounting purposes