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Definition
Net book value (NBV) is the value of a fixed asset in the accounts after deducting accumulated depreciation from its original cost. It is what the asset is carried at on the balance sheet.
In plain terms
Buy a £20,000 machine, depreciate £4,000 a year, and after two years its net book value is £12,000. It is an accounting figure, not necessarily what the asset would fetch if sold.
Why it matters for your company
Net book value shapes your balance sheet's asset total, but do not confuse it with market value — a fully depreciated asset can still be working and worth something. When you sell an asset, the gap between sale price and NBV is a profit or loss on disposal.
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