Book value: Difference between revisions
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''Accounting.'' | 1. ''Accounting.'' | ||
The value as recorded in a company’s books, in other words its accounts including its published balance sheet. | The value as recorded in a company’s books, in other words its accounts including its published balance sheet. | ||
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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 more closely with market values. | 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 more closely with market values. | ||
2. ''Record keeping.'' | |||
A value recorded in an internal record of any kind, not necessarily accounting books and records. | |||
Distinguished from the current market value. | |||
Revision as of 03:30, 23 May 2021
1. Accounting.
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 an asset might be expected to raise if offered for sale. (Or at which a liability might be settled.)
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 more closely with market values.
2. Record keeping.
A value recorded in an internal record of any kind, not necessarily accounting books and records.
Distinguished from the current market value.
