It refers to the value at which the books of the company report an asset. The net book value calculator calculates the cost of assets less total or accumulated depreciation/amortization on such assets. We use the term depreciation in the case of tangible assets, while amortization is the term we use for intangible assets—for example, patents, goodwill, Copywrite, etc.
The concept of the net book value is important because of the existence of differences in the amount recorded in the books of the company and its value prevailing in the market. The market value can either be higher or lower than the book value. So, in order to determine the minimum price at which one can sell the asset, book value is crucial. Also, it is a base for various financial ratios.
The formula for calculating the net book value of an asset is to deduct the amount of accumulated depreciation from the cost of the asset. To present it into an equation:
Net Book Value = Original Cost of the Asset – Accumulated Depreciation (till the date of calculation)
Net Book Value Calculator
How to Calculate using Calculator?
Enter the following details into the net book value calculator for quick calculation.
Original Cost – We need to enter the original cost of the asset. The cost at which the company acquires the asset initially.
Accumulated Depreciation – Accumulated depreciation refers to the total depreciation charged on the asset since putting it to use till the date of calculation. This simply means the depreciated value of the asset till the date of calculation. If the company charges depreciation as per the straight-line method (SLM), then multiply the amount of depreciation for a year by the number of years the asset is in use. And, if the company is using the written down value (WDV) method, then simply add the depreciation of the years elapsed since the asset has been put to use.
