About Accumulated Depreciation

Accumulated depreciation represents the total depreciation expense allocated to a fixed asset from the date it was put into use. It helps businesses match the cost of an asset to the revenue it generates over its useful life.

Depreciation Methods:

• Straight Line: Equal depreciation expense each year
• Declining Balance: Higher depreciation in early years, decreasing over time
• Sum of Years Digits: Accelerated depreciation using a fraction of remaining life
• Units of Production: Depreciation based on actual usage or production

Book Value = Cost of Asset - Accumulated Depreciation