Book Value

What is Book Value?

Book or carry value is the value of an asset after deducting accumulated depreciation.

How it Works

A business will own assets such as buildings and equipment. 

The business will acquire the asset for a certain amount of money.

Then, each year, the asset will lose some of its value.

The loss of value is known as depreciation.

You will need to record the depreciation as an expense.

This process continues, one year after the next.

The depreciation accumulates over time and is known as accumulated depreciation.

You record accumulated depreciation in the accumulated depreciation account.

In the process, you are said to be writing down the asset’s value.

The written down asset’s value is known as book value.

© R.J. Hickman 2020