Book value is a very important aspect of finance and accounting. The book values contribute a major hand in developing a proper balance sheet. Book value is sort of some asset’s value which corresponds to that value written in the balance sheet. The value comprises the real or original price of the asset neglecting the depreciation or any impairment made against the asset. The book value of an asset is equal to the asset’s cost less accumulated depreciation.
Formulating Book Value
The main formula to calculate Book is very easy to understand. The book value of an asset is equal to the following:
Book value = total assets – intangible assets – liabilities.
Book value can be deduced by deducting intangible assets or non-physical assets and liabilities like debt, or something that doesn’t provide profit instead makes more burden on the company from the entire assets of the company.