Accumulated depreciation refers to the cumulative amount of depreciation expense that has been charged against a company’s assets, such as its property, plant, and equipment, over time. For example, if a company has a piece of equipment valued at $10,000 with a useful life of 10 years, and it depreciates this asset by $1,000 annually, after three years, the accumulated depreciation would amount to $3,000. This figure is recorded on the balance sheet as a contra asset account, meaning it offsets the original value of the asset it relates to. By tracking accumulated depreciation, businesses can assess the remaining book value of their assets and plan for replacements or upgrades. In accounting software, such as Easy Month End, accumulated depreciation is a common item tracked in balance sheet reconciliations and reported during month-end close procedures.