Net book value
In accounting, net book value means cost less accumulated depreciation and impairment — the carrying amount of an asset.
- Layer
- Lexicon
- Defined in
- Lexicon
- Also called
- NBV
- Components
- 1
Authority
This definition follows ASC 360-10.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
The lesson that teaches this
Accounting, 0 to 1 — a free course taught end to end on one month of one company, with the spreadsheet exercises to work it yourself.
Net book value, in use
Quoted from the 2 documents that use the word — what it does to an interface, in the spec's own sentence.
Disposal computes gain/loss and shows the working: Proceeds − NBV = Gain/(Loss).
Schedules, accruals & roll-forwards — 5. Fixed assets & depreciation
Cost, in-service date (not purchase date, labeled explicitly), life, method, convention, accumulated depreciation, NBV.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- market value
- fair value
Components that render this
The concept is not documentation-only. These are the components that name it in their specification, grouped and stated exactly as the catalog states them.
Components that render the terms it depends on
Little in the catalog names this concept outright, but its definition is built out of others that are named. These render depreciation, asset.
6Statements
Family specTerms this one depends on
- DepreciationSpreading the cost of a fixed asset over the periods it serves
- ImpairmentWriting an asset down because its carrying amount is not recoverable — for long-lived assets, a recoverability test on undiscounted cash flows, then a write-down to fair value
- AssetA present right of the entity to an economic benefit (FASB CON 8 ¶E16)
Also in Fixed assets & leases
Work with this concept
The calculators that compute it and the ledger payloads that carry it. A definition is where a reader starts; these are where they go next.
- Journal entry for depreciationEach period, debit Depreciation expense and credit Accumulated depreciation for the period's charge. The asset account keeps its original cost; accumulated depreciation, a contra-asset, grows until net book value reaches salvage value.Entry
- Journal entry for the sale of a fixed assetWhen a fixed asset is sold, debit Cash for the proceeds and Accumulated depreciation for its balance, credit the asset for its original cost, and book the difference as a gain (credit) or a loss (debit) on sale.Entry
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.