Book value
Book value is the amount at which an asset appears on the balance sheet, calculated as its original purchase cost minus all accumulated depreciation charged to date. It is also called carrying value.
Also known ascarrying value · carrying amount
See it move
A split bar divides the €30,000 original cost of a delivery van into €18,000 of accumulated depreciation charged to date and a remaining book value — also called carrying value — of €12,000. That €12,000 figure is what appears on the balance sheet, representing the portion of the original cost not yet expensed.
The formula
Variables
- Book value (carrying value) (€)
- Original cost of the asset (€)
- Accumulated depreciation charged to date (€)
Also called carrying value; the remaining undepreciated cost reported on the balance sheet.
Check yourself
A machine was purchased for €45,000. Straight-line depreciation of €5,000 per year has been charged over three years. What is the machine's book value at the end of year three?
If you trained under a national GAAP
DE · HGBWhere national-GAAP intuition diverges from the international standard
HGB (German)
Under HGB, the book value of a non-current asset is always its original acquisition or production cost reduced by accumulated scheduled depreciation and any required impairment write-downs. Once an asset has been written down, it may not be written back above the depreciated historical cost figure even if the asset's market value subsequently recovers, preserving a consistently conservative carrying amount.
IFRS
IFRS offers preparers a policy choice for classes of property, plant and equipment: the cost model, which mirrors the national approach, or the revaluation model, under which the asset is restated to its current fair value at each revaluation date. Under the revaluation model, book value can exceed original cost, and the uplift is recognised directly in equity as a revaluation surplus rather than through profit or loss.