Accounting Glossary

Accumulated Depreciation

Definition

The total depreciation expense recorded against a long-term asset since it was placed in service. It is a contra-asset account that reduces the gross cost of the asset on the balance sheet.

Formula

Book Value = Cost − Accumulated Depreciation

Example

Equipment costing $50,000 with $20,000 of accumulated depreciation has a book value of $30,000.

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