Accumulated Depreciation

Explanation: Accumulated Depreciation is a measure that represents the total depreciation expense recorded for an asset since the time it was acquired. Depreciation is the gradual decrease in the value of an asset over time due to wear and tear, obsolescence, or other factors.

Companies in India, as per accounting standards, spread the cost of a long-term asset (like machinery or buildings) over its useful life. Accumulated Depreciation is the sum of all the depreciation recorded on that asset. It is subtracted from the original cost of the asset to determine its book value.

Example: TCS had accumulated depreciation of 27,959 crore as of FY 23. This indicates that since TCS acquired its assets, it has recorded a total depreciation expense of 27,959 crore against those assets. Accumulated Depreciation is deducted from the original cost of the assets to calculate their net book value or carrying value. In essence, it represents the portion of the asset’s cost that has been allocated as an expense over time to reflect its diminishing value due to wear and tear, obsolescence, or other factors.

You can view the Accumulated Depreciation for any company on Radar under Non-Current Assets in Balance Sheet section.