Book Value Vs Carrying Value
Book value of equity securities the book value of a company s equity reflects the historical operating and financing decisions of its management.
Book value vs carrying value. It provides for provision for an impairment loss in case the carrying value of an asset is more than its recoverable amount. The carrying value or book value is an asset value based on the company s balance sheet which takes the cost of the asset and subtracts its depreciation over time. The carrying value of an asset means its book value.
The term book value is derived from the accounting practice of recording asset value based upon the original historical cost in the books. Carrying value and book value may be used by different organizations but in the end they mean essentially the same thing. The term net asset value is commonly used in relation to mutual funds and is used to determine the value of the assets held.
The concept is called carrying value because the original value of the item is carried over from its original documentation and combined with losses to represent a new value carried in the business books. In most contexts book value and. Book value also known as carrying value or net asset value net asset value net asset value nav is defined as the value of a fund s assets minus the value of its liabilities.
The fair value of an asset is. The carrying value or book value is an asset value based on the company 39 s balance sheet which takes the cost of the asset and subtracts its depreciation over time. For fundamental and value growth investors this value is important because for a company having a high market value from its book value is a good opportunity for investing.
The current recorded value of an asset or company. Book value can refer to several different financial figures while carrying value is used in business accounting and is differentiated from market value. Book value can refer to several different financial figures while carrying value is used in business accounting and is typically differentiated from market value.
In other words the carrying value generally reflects equity while the fair value reflects the current market price.