Accumulated depreciation

Accumulated Depreciation is the total depreciation charged till date. It is shown in balance sheet by deduction from the cost of Asset.

Regarding Cash Flow- Only depreciation for the year shall be adjusted in operating activities. No treatment of accumulated Depreciation.

Accumulated Depreciation, as the name suggests, is the total depreciation calculated with respect to a particular asset till date, from the date of its purchase. Depreciation charged every year is transferred to the accumulated depreciation account.

Dr. Depreciation A/c

Cr. Accumulated Depreciation A/c

Accumulated depreciation has no impact on the cash flow statement. Only the depreciation calculated for the year is added back under 'Cash flow from Operating Actvities'.