accumulated depreciation asset or liability

Is accumulated depreciation an asset or liability? Accumulated depreciation is a contra asset account, not a liability. It reduces the book value of fixed assets, such as machinery, equipment, and buildings, to reflect their usage and wear over time. While it is linked to assets, accumulated depreciation acts as a negative value against an asset's original cost, helping businesses track the decline in the asset's value. Understanding how accumulated depreciation works is essential for accurate financial reporting and asset management.