NET BOOK VALUE LÀ GÌ
What is “Net Book Value of Assets”?
Net book value, also known as net asmix value, is the value at which a company reports an asphối on its balance sheet. It is calculated as the original cost of an asset less accumulated depreciation, accumulated amortization, accumulated depletion or accumulated impairment.quý khách đang xem: Net book value là gì
Key Learning Points
Net book value or net asphối value is the value an asphối is reported in a company’s set of accountsNet book value is calculated as the asset’s original cost less accumulated depreciation, depletion, & impairmentThe balance sheet is a financial statement that reports the financial position of a company at a point in time with all assets being reported at their net book value (NBV)The original cost of an asset is the total cost incurred by a company to purchase and deliver an asphối for its intended useThe net book value of an asphối is rarely equal khổng lồ its market value, instead, it shows the value of the asmix after deducting accumulated depreciation which is based on prudent accounting principlesFormula
The formula to lớn calculate net book value is:
NBV = Gross Cost Of Asset – Accumulated Depreciation
Let’s start by calculating the original cost of an asset.
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The original cost of an asset includes the original cost of acquisition plus any costs associated with the delivery, & intended use of an asmix to lớn the purchase price. As an example, the original cost of an asmix can include the purchase price, delivery thanglon77.comes, setup costs and customs duties.
Calculation:
Deductions
As mentioned above, there are several expenses you must deduct from the original cost of an asset to get the net book value. Let’s look at depreciation, amortization and depletion. These expenses are a ratable charge over the asset’s useful lithanglon77.com.dế yêu. This means the net book value of an asmix should decrease at a predictable rate throughout the asset’s lithanglon77.com.điện thoại.
Example:
Company XYZ acquired an asphối for $10,000 & uses the straight-line method of depreciation. It expects the machine to have a useful lithanglon77.com of 10 years.
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To calculate annual depreciation:
Annual Depreciation Expense = Original Cost of Asmix / Number of Years of Useful Lithanglon77.com
The calculation becomes the following:
If Company XYZ had the asphối for 3 years, then the accumulated depreciation would be 3,000.
Net Book Value Calculation
We mentioned above sầu that you deduct accumulated depreciation from the original cost of an asphối lớn get the net book value.
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If we use the figures from above sầu, it works out as follows:
Why is Net Book Value Important?
The net book value of a company is not the same as the market value of a company, since the book values of the assets & liabilities are not the same as the market values of all the assets & liabilities. However, net book value does provide an important function for users of accounts since it is based on prudent principles, and can sometimes be used khổng lồ indicate the minimum value (or floor value) that the company is worth.