Difference between revisions of "Book value"

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Historically, the book value of an asset was generally its original cost less any depreciation or other write-down in value.   
 
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.
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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 much more closely with market values.
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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.
  
  

Latest revision as of 10:56, 29 November 2019

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.


See also