Book value definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. The term book value can be defined as: Asset’s acquisition costs less its accumulated depreciation (or depletion, or amortization); also sometimes used synonymously as the carrying value of an account. The book value calculation allows us to tell the reader of financial statements what the cost of an asset is, the estimated decrease in value of the asset, and the estimated value of the asset, book value, by recording the asset a cost and then using a contra account to record the estimated determination of value or allocation of cost, the difference between the two accounts being the book value or estimated value of the asset.
