What is 'Book Value'?

An asset's book value is equal to its carrying value on the balance sheet, and companies calculate it by netting the asset against its accumulated depreciation. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Term of the Day | Words to Know Book Value An asset's book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated depreciation. Book value can also be thought of as 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. The formula for calculating book value per share is the total common stockholders' equity less the preferred stock, divided by the number of common shares of the company. Read More » Related to "Book Value" Book Value Vs. Market Value: What's the Difference Understanding book value and market value is helpful in determining a stock's valuation and how the market views a company's growth prospects. Read More » What Book Value Means to Investors Learn the impact a book value or the price-to-book (P/B) ratio on a business and if low book value is a good investment. The ratio is a staple for value investors, but does it deserve all the fanfare? 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 has its drawbacks. Read More » SPONSORED BY INVESCO The Complete Guide to ETFs ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. Learn More » Related Definitions Accumulated Depreciation Accumulated depreciation is the cumulative depreciation of an asset up to a single point in its life. Read More » Intangible Asset An intangible asset is an asset that is not physical in nature and can be classified as either indefinite or definite. Read More » Market Value Market value is the price an asset gets in a marketplace. Market value also refers to the market capitalization of a publicly traded company. Read More » Price-To-Book Ratio Companies use the price-to-book ratio (P/B ratio) to compare a firm's market to book value and is defined by dividing price per share by book value per share. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC, All Rights Reserved | Privacy Policy