what account is accumulated depreciation

Accumulated depreciation is a contra asset account that tracks the cumulative depreciation of a company’s fixed assets over time. Unlike regular asset accounts, which record the original cost of assets, accumulated depreciation reflects the reduction in value due to wear and tear, obsolescence, or usage. It is subtracted from the value of related assets on the balance sheet to show their net book value. This account helps businesses comply with accounting standards by reflecting the real-time value of assets and ensuring accurate financial reporting and tax compliance.