Book Value What Is

For assets the value is based on the original cost of the asset less any depreciation amortization or impairment costs made against the asset.

Book value what is. Examples of book value calculations. The total amount of stockholders equity appearing on a corporation s balance sheet. Businesses can use this calculation to determine how much depreciation costs they can write off on their taxes.

The company s balance sheet is where you ll find total asset value and for. The book value of an asset is the value of that asset on the books the accounting books and the balance sheet of a company. The book value of a company is the total value of the company s assets minus the company s outstanding liabilities.

Book value is a widely used financial metric to determine a company s value and to ascertain whether its stock price is over or under appreciated. It s wise for investors and traders to pay close attention however to the nature of the company and other assets that may not be well represented in the book value. Book value is calculated by subtracting any accumulated depreciation from an asset s purchase price or historical cost.

As a result book value can also be. In accounting book value is the value of an asset according to its balance sheet account balance. If a company s computer system had a cost of 300 000 and it has accumulated depreciation of 80 000.

What does book value mean. Finding the nav involves subtracting the company s short and long term liabilities from its assets to find net assets. Then you d divide the net assets by the number of shares of common stock preferred stock or bonds to get the nav per share or per bond.

It s also known as the net book value. Book value is an asset s original cost less any accumulated depreciation and impairment charges that have been subsequently incurred. The book values of assets are routinely compared to market values as part of various financial analyses.