Book Value Formula In Accounting
When it reaches the end of its useful life the nbv should be equal to its salvage value.
Book value formula in accounting. The formula for calculating nbv is as follows. Net book value of a company. To calculate the tangible book value per share malcolm finds that the firm s number of shares outstanding is 2 000 000 million.
Net book value original asset cost accumulated depreciation. Accumulated depreciation per year depreciation x total number of years. Book value may also be.
The company s balance sheet. Formula to calculate book value of a company. 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.
Note that the book value of the asset can never dip below the salvage value even if the calculated expense that year is large enough to put it below this value. The formula is shown below. Original cost accumulated depreciation.
To arrive at the book value simply subtract the depreciation to date from the cost. In the example above the asset s book value after 6 years would be 10 000 6000 or 4000. Below is the book value formula.
The net book value of a company shows the total book value of all its assets and liabilities. Book value of assets formula. The book value figure is typically viewed in relation to the company s stock value market capitalization and is determined by taking the total value of a company s assets and subtracting any of the liabilities the company still owes.