Book value

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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