Book Value Of An Asset Meaning

Book value of asset definition.

Book value of an asset meaning. The book value of an asset is an accounting calculation that measures the impact of depreciation on an asset s value. Traditionally a company s book value is its total assets minus intangible assets and liabilities. For companies it is calculated as the original cost of the asset less accumulated depreciation and impairment costs.

However in practice depending on the source of the calculation book value may variably include goodwill intangible assets or both. For assets the value is based on the original cost of the asset less any depreciation amortization or impairment costs made against the asset. In accounting book value is the value of an asset according to its balance sheet account balance.

The book value of an asset isn t helpful for individuals while the formula still works the tax benefits don t extend beyond business assets. The value inherent in.