Definition:

Accumulated depreciation is the total decrease in the value of an asseton the balance sheet of a business, over time. An asset which is new will have no accumulated depreciation. As the asset ages, accumulated depreciation increases.

The value of assets on the balance sheet is expressed as:

• Cost of asset
  
• Less accumulated depreciation
  
• Equals book value of that asset.

The value of all assets of each type are considered together on the balance sheet, rather than each individual asset.
Examples:

On the balance sheet of the company on December 31, 2009:

• Cost of Equipment $239,000
  
• Less Accumulated Depreciation $100,000
  
• Book Value of Equipment $139,000