Accumulated Depreciation

In accounting, the amount of Depreciation expense that has been claimed to date. Same as accrued depreciation. See Adjusted Tax Basis.
Example: A building was bought for $100,000. The annual Straight-Line Depreciation expense is $2,500. The accumulated depreciation in 3 years is $7,500.

Sum of depreciation charges taken to date on a fixed asset. Accumulated depreciation is a Contra Account to the fixed asset to arrive at Book Value. For example, on 1/1/2004 an auto is bought costing $10,000, with a salvage value of $1000 and a life of 10 years. Using Straight-Line Depreciation the accumulated depreciation on 12/31/2007 would be $3600 ($900 x 4).

The total depreciation charged against all productive assets as stated on the balance sheet. The charge is made to allow realistic reduction in the value of productive assets and to allow tax-free recovery of the original investment in assets.