Accumulated Depreciation is the total amount by which an asset’s value has decreased over a specified period of time, possibly several years. Typically an asset will be shown on a company’s balance sheet as depreciating monthly or annually, and ‘accumulated depreciation’ is the total amount by which that asset has depreciated over, for example, three or four years. So the Book Value of the asset (ie: its current net worth) will be calculated by: Cost of Asset less Accumulated Depreciation.

[BACK TO ACCOUNTING TERMS]