A company’s book value is its total assets minus intangible assets and liabilities, such as debt. A company’s book value might be more or less than its market value.
Net Book Value (NBV): This is the current book value of an asset or liability; that is, its original book value net of any accounting adjustments such as depreciation. NBV is the net result of a variety of accounting decisions related to whether expenditures are capitalised or expensed. NBV is a function of the property classification of the asset, the application of a depreciable life and method, the recognition of a salvage value, and the application of a depreciation convention. NBV is further influenced by the accounting system’s ability to keep up with asset transfers and partial or complete retirement of the asset itself. In addition, there is the impact of fully reserved assets that have zero NBV or that may even be removed from the record when they become fully reserved.
