What effect does depreciation generally have on an asset's balance sheet over time?

Depreciation reflects the decline in value of an asset over time due to factors such as wear and tear, obsolescence, or age. When an asset is depreciated, its book value is reduced on the balance sheet to more accurately represent its current worth. As depreciation accumulates, it decreases the total value of the asset on the balance sheet, reflecting the loss in value that occurs over its useful life. This adjustment is essential for providing a clearer financial picture of the company's assets and helps stakeholders understand the depreciation impact on the overall financial position of the entity.