recorded value of asset the value of an asset as recorded in a company's balance sheet, usually the original cost with an allowance made for depreciation. Book value is not usually the same as market value (the amount it could be sold for).
2. Stockholding & Investments
firm's own valuation of its stock the value of a company's stock according to the company itself, which may differ considerably from the market value. Book value is calculated by subtracting a company's liabilities and the value of its debt and preferred stock from its total assets. All of these figures appear on a company's balance sheet. For example:
$ Total assets 1,300 Current liabilities −400 Long-term liabilities, preference shares −250 Book value = 650
Book value represents a company's net worth to its stockholders. When compared with its market value, book value helps reveal how a company is regarded by the investment community. A market value that is notably higher than the book value indicates that investors have a high regard for the company. A market value that is, for example, a multiple of book value suggests that investors' regard may be unreasonably high.
Related definitions of "book value"