Average Net Book Value Formula

Significance of net book value.

Average net book value formula. How is net book value calculated. This means the net book value of the truck would be 65 000 after five years. Nbv 100 000 7 000 x 5 years 65 000.

Alternatively book value can be calculated as the sum total of the overall shareholder equity of the company. Book value formula calculates the net asset of the company derived by total of assets minus the total liabilities. The formula used to calculate the net book value of the assets is as below.

Net book value formula original purchase cost accumulated depreciation original purchase cost here means the purchase price of the asset paid at the time when the company purchased the assets. To define net book value it can be rightly stated that it is the value at which the assets of a company are carried on its balance sheet. Net book value cost of the asset accumulated depreciation.

The net book value of an asset is calculated by deducting the depreciation and amortization of an asset from its original cost.