Book Value

What is book value?

Book Value Definition: The original price, or book value, refers to how much you pay for an item or an asset. This amount is recorded on the balance sheet, which is based on the cost of the asset.

Any changes to the book value of this asset are recorded as depreciation (decreased value over time), amortization (paying off the asset in installments or payments), and other factors that impact the asset. Book value applies to tangible assets mostly, though it can also apply to intangible assets and goodwill. If an asset appreciates or increases in value, the original price remains on the books and in accounting records as the original price.

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