Book value


    What does book value mean?

    In financial accounting, book value is the value of an asset on the balance sheet.

    It is based on the original cost less any depreciation, amortization or impairment costs.

    Traditionally, a company’s book value is its total assets minus intangible assets and liabilities.

    The term book value is sometimes also referred to as “carrying value”. In the United Kingdom, the term “net asset value” may refer to the book value of a company.

    It is the total value of a public company’s assets, which the shareholders would receive if the company was liquidated. This means the market capitalisation of a company will only rarely be below the book value.