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Definition
Net book value is the carrying amount of an asset on the balance sheet: its original cost less accumulated depreciation (or amortisation for intangibles). It reflects accounting treatment, not necessarily current market value.
In plain terms
It's the asset's value on your books after wear-and-tear has been written off — which may be more or less than you'd actually get for it.
Why it matters for your company
Lenders taking asset security look at realisable value, not just net book value. Understanding the difference matters when assets back borrowing. See how to read a balance sheet.
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