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Net Book Value

Net book value (NBV) is a measure of the value of an asset on a company's balance sheet after accounting for depreciation or amortization. It's calculated by taking the original cost of the asset and subtracting the accumulated depreciation or amortization.

For example, if a company buys a machine for $10,000 and after 5 years, the accumulated depreciation is $4,000, the net book value would be $6,000 ($10,000 - $4,000). NBV is important because it reflects the current value of an asset, which can be used to assess the financial health of a company. It also provides a basis for calculating gain or loss when an asset is sold, as the sale price is compared to the NBV to determine whether there was a gain or loss on the sale.

See also

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