accumulated depreciation

accumulated depreciation definition - business

accumulated depreciation

The total amount of depreciation that has been recorded for an asset since its date of acquisition. For example, a computer with a five-year estimated life that was purchased for $2,000 would have accumulated depreciation of $800 [( $2,000/5 ) × 2] and a book value of $1,200 ($2,000 - $800) after two years of straight-line depreciation. Also called allowance for depreciation, depreciation reserve.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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