Skip to main content
Select Source:

Book Value

BOOK VALUE

The current value of an asset. The book value of an asset at any time is its cost minus its accumulated depreciation. (Depreciation reflects the decrease in the useful life of an asset due to use of the asset.) Companies use book value to determine the point at which they have recovered the cost of an asset.

The net asset value of a company'ssecurities. This is calculated by subtracting from the company's total assets the following items: intangible assets (such as goodwill), current liabilities, and long-term liabilities andequityissues. This figure, divided by the total number of bonds or of shares of stock, is the book value per bond or per share of stock.

The calculation of book value is important in determining the value of a company that is being liquidated. For example, if a corporation has 100,000 shares of stock issued and outstanding and its assets total $5 million and its intangible assets and all liabilities total $1.6 million, its net asset value is $3.4 million and its book value per share is $34.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Book Value." West's Encyclopedia of American Law. . Encyclopedia.com. 19 Aug. 2017 <http://www.encyclopedia.com>.

"Book Value." West's Encyclopedia of American Law. . Encyclopedia.com. (August 19, 2017). http://www.encyclopedia.com/law/encyclopedias-almanacs-transcripts-and-maps/book-value

"Book Value." West's Encyclopedia of American Law. . Retrieved August 19, 2017 from Encyclopedia.com: http://www.encyclopedia.com/law/encyclopedias-almanacs-transcripts-and-maps/book-value

book value

book val·ue • n. the value of a security or asset as entered in a company's books. Often contrasted with market value.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"book value." The Oxford Pocket Dictionary of Current English. . Encyclopedia.com. 19 Aug. 2017 <http://www.encyclopedia.com>.

"book value." The Oxford Pocket Dictionary of Current English. . Encyclopedia.com. (August 19, 2017). http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/book-value

"book value." The Oxford Pocket Dictionary of Current English. . Retrieved August 19, 2017 from Encyclopedia.com: http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/book-value