What Is Book Value. What is Book Value. Book value is equal to the cost of carrying an asset on a companys balance sheet and firms calculate it netting the asset against its accumulated depreciation.
The book values of assets are routinely compared to market values as part of various financial analyses. Book value is a companys equity value as reported in its financial statements Three Financial Statements The three financial statements are the income statement the balance sheet and the statement of cash flows. An assets original cost goes beyond the ticket price of the itemoriginal cost includes an assets purchase price and the cost of setting it up eg transportation and installation.
Book value is an assets original cost less any accumulated depreciation and impairment charges that have been subsequently incurred.
For the initial outlay of an investment. It is an estimate of what the asset is worth on the companys balance sheet but. The value inherent in. The book values of assets are routinely compared to market values as part of various financial analyses.