Accumulated depreciation is the running total of all depreciation charged on an asset to date. In the ledger it is a contra-asset account: the asset stays at cost, and accumulated depreciation is shown against it, so cost − accumulated depreciation = NBV.
Why it matters
Keeping cost and accumulated depreciation separate shows both how much was invested and how much has been used up. On disposal, both are removed from the books together.
A useful ratio
Accumulated depreciation ÷ cost gives a rough sense of how far through its depreciable life an asset (or a whole asset class) is. If your vehicle fleet shows 85% of cost already depreciated, a wave of replacements is probably coming — a useful early signal for capital budgeting, even though book life and physical condition are not the same thing.
In Asetavo
Posted book depreciation runs update each asset's accumulated depreciation and NBV; drafts do not.