why is accumulated depreciation an asset

Accumulated depreciation is classified as a contra asset account, meaning it is linked to and offsets the value of a related asset on the balance sheet. While depreciation itself is an expense that reduces an asset's value over time, accumulated depreciation does not represent a standalone asset. Instead, it accumulates over the life of an asset, reducing its book value. By recording accumulated depreciation, businesses reflect the asset's actual worth, taking into account its wear and tear or obsolescence. Although it reduces the asset's total value, accumulated depreciation remains part of the asset category, as it’s used to track the reduction in value