Book Value of an Asset

Original cost of a Capital asset less its Accumulated Amortization. As an example, assume a delivery van was bought for $25,000 on January 1st, 2008. It is estimated that the van will help generate revenue and be used in business operations for 4 years, bringing in revenue of $40,000 a year. At the end of 4 years, its salvage value will be nil meaning the Van will be useless. Thus the book value of this Van after 4 years will be $0.

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