Book value

The value as recorded in a company’s books, in other words its accounts including its published balance sheet.

Historically, the book value of an asset was generally its original cost less any depreciation or other write-down in value.

This was distinct from - and could be very different from - prevailing market value, the fair market price which the asset might be expected to raise if offered for sale.

In order to address the problems arising from differences between book values and market values, accounting practice has moved substantially toward a system of book valuation which is aligned much more closely with market values.

See also

• Book entry
• Equity
• Market value
• Market value added
• Net book value
• Return on capital employed
• Shareholders’ funds