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Definition
Carrying value (or net book value) is the amount at which an asset sits on the balance sheet: original cost minus accumulated depreciation, amortisation or impairment.
In plain terms
It is the accounting value, not the price you would fetch on the open market. A fully depreciated machine can carry at zero yet still be worth selling.
Why it matters for your company
Lenders compare carrying value with realistic market value when assessing security — the gap drives the haircut. See fair value.
Related reading
Net book value
Net book value is an asset's cost less accumulated depreciation — the balance-sheet figure, which may differ…
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Impairment
Impairment writes an asset down when it is worth less than the books say — a non-cash charge that keeps the…
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Fair value
Fair value is what an asset would fetch in an orderly sale between willing, informed parties — the…
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Depreciation schedule
A depreciation schedule spreads the cost of a fixed asset across its useful life in your accounts — matching…
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