Book Value

Discipline: Economics

Book value, or carrying value, is the value of an asset according to the firm's financial statements.

The book value of an asset typically equals to its original acquisition value less accumulated depreciation.

The book value of a company, however, equals to the shareholders' equity, which is the firm's assets minus its liabilities.

The term 'book value' refers to an accounting valuation. For companies whose shares are traded publicly, investors contrast the company book value to the market value.

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