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Business & Finance
Business Accounting and Bookkeeping
Financial Statements

What is difference between accumulated depreciation and depreciation expenses how are they related?


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Wiki User
September 28, 2008 11:56AM

Depreciation is a charge to the Profit and Loss account or Income statement that shows the charge to a fixed asset (or group of fixed assets) in that period. Accumulated Depreciation is the total depreciation charged to that fixed asset since it was purchased and is shown in the balance sheet reducing the value at purchase to the value at which it is currently held (its Net Book Value).