Book Value

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Book Value is the amount at which property is shown in accounting records of a business enterprise of individual.  It is the net amount at which an asset is carried on the books or reported in financial statements   Book value is the asset's cost at acquisition less the amount of accumulated depreciation on the asset.


USPAP 2002 defines book value as the sum of the asset accounts (less provisions for depreciation, depletion, and amortization) minus the liability accounts shown on the balance sheet.  For corporations, book value is synonymous with net worth and shareholders' equity. (USPAP, 2002 ed.)


With respect to a business enterprise, book value is the difference between total assets (net of depreciation, depletion, and amortization) and total liabilities as they appear on the balance sheet.  It is synonymous with net worth and shareholder's equity.


In accounting, book value is the net amount shown for an asset on the balance sheet. It is equal to the cost of the asset less its related valuation account. For example, the book value of computer equipment is its initial cost less accumulated depreciation.


Book value differs from market value because it is based on historical cost rather than current value.

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