What is 'Book Value'?

1. The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated depreciation. 2. The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities.

Sharper Insight. Smarter Investing. Manage Preferences TERM OF THE DAY Book Value Book value of an asset is the value at which the asset is carried on a balance sheet and calculated by taking the cost of an asset minus the accumulated depreciation. Book value is also the net asset value of a company, calculated as total assets minus intangible assets (patents, goodwill) and liabilities. For the initial outlay of an investment, book value may be net or gross of expenses such as trading costs, sales taxes, service charges and so on. Breaking it Down: Book value is also known as "net book value (NBV)" and, in the... Read More Related to "Book Value" Market Value Versus Book Value Understanding book value and market value is helpful in determining a stock's valuation and how the market views a company's growth prospects in the future. Read More Book Value: How Reliable Is It For Investors? In theory, a low P/B ratio means you have a cushion against poor performance. In practice, it is much less certain. Read More Using The Price-To-Book Ratio To Evaluate Companies The Price-To-Book (P/B) ratio can be an easy way to determine a company's value, but it isn't magic! Read More Related Definitions Book Value Reduction A book value reduction takes place when writing down the value of an asset's carry value, based on changes in current market values. Read More Public Book (Of Orders) A book containing all of the buy and sell orders for a specific security that are placed by the public. Read More Book-to-Market Ratio The book-to-market ratio is a ratio used to find the value of a company by comparing the book value of a firm to its market value. Read More Depreciated Cost Depreciated cost is the original cost of a fixed asset less accumulated depreciation; this is the net book value of the asset. Read More You are currently subscribed as: mondemand.forex@blogger.com Unsubscribe  |  Manage Subscriptions Investopedia, LLC, A Division of IAC. 114 West 41st St, floor 8, New York NY 10036 Copyright © 2018, Investopedia, LLC. All Rights Reserved Follow Us: