Book Value
What is Book Value?
Book or carry value is the value of an asset after deducting accumulated depreciation.
![bv1](https://seeaccountingnow.online/wp-content/uploads/2020/05/bv1.jpg)
How it Works
A business will own assets such as buildings and equipment.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/bv2.jpg)
The business will acquire the asset for a certain amount of money.
![bv3](https://seeaccountingnow.online/wp-content/uploads/2021/06/bv3.jpg)
Then, each year, the asset will lose some of its value.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/bv4.jpg)
The loss of value is known as depreciation.
![bv5](https://seeaccountingnow.online/wp-content/uploads/2021/06/bv5.jpg)
You will need to record the depreciation as an expense.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/bv6.jpg)
This process continues, one year after the next.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/bv7.jpg)
The depreciation accumulates over time and is known as accumulated depreciation.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/bv8.jpg)
You record accumulated depreciation in the accumulated depreciation account.
![bv9](https://seeaccountingnow.online/wp-content/uploads/2021/06/bv9.jpg)
In the process, you are said to be writing down the asset’s value.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/bv10.jpg)
The written down asset’s value is known as book value.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/bv11.jpg)
© R.J. Hickman 2020