Asset Market Value vs Asset Book Value

Asset Market Value vs Asset Book Value

See Also:
Accounting Income vs Economic Income
Economic Value Added
Value Drivers:Building Reliable Systems to Sustain Growth
Basis Definition
Variance Analysis
Goodwill Impairment

Asset Market Value versus Asset Book Value

Book value and market value are two ways to value an asset. An asset’s book value can differ from its market value. Market value is the value of an asset as currently priced in the marketplace. In comparison, book value refers to the value of an asset as reported on the company’s balance sheet; however, some assets are reported at market value on the balance sheet.
Book value is equal to the asset’s historical purchase price minus accumulated depreciation. Since book value is based on the asset’s actual purchase price, consider it more reliable but less relevant than market value.

Market value, also called fair market value, is equal to the asset’s current price or value in the open marketplace. Since market value is based on current market prices, consider it more relevant but less reliable than book value.

Asset Value for Company Valuations

Are you comparing asset valuation methods for the purpose of valuing your company? This can become complex, especially when comparing methods for valuing assets. When a valuation becomes complex, it is standard practice to consult with a valuation firm. Need help finding one? We will connect you with one of our strategic partners for your valuation needs. Fill out the form below to get connected:

Your will receive your information between 9-5 Monday through Friday. You can expect to hear back within 24 hours. We only use your information to contact you for the desired help.

[gravityform id=”18″ name=”Danto Contact Form” title=”false”]

If you don’t want to leave any value on the table, then download the Top 10 Destroyers of Value whitepaper.
asset market value

[box]Strategic CFO Lab Member Extra

Access your Exit Strategy Execution Plan in SCFO Lab. This tool enables you to maximize potential value before you exit.

Click here to access your Execution Plan. Not a Lab Member?
Click here to learn more about SCFO Labs[/box]
Logistics Chain

Related Blogs
WIKI CFO® - Browse hundreds of articles
Skip to content