Written-down value

Written-down value

The book value of an asset after allowing for depreciation and amortization.

Net Book Value

In accounting, an asset's original price minus depreciation and amortization. For example, if a company bought piece of technological equipment for $100,000 with an absolute physical life of ten years and a patent lasting 20 years, one would account the net book value as the original price and subtract $10,000 per year (for depreciation due to reduced physical life) and $5,000 per year (for amortization).

In accounting a company, the net book value is the value of the company's assets minus the value of its liabilities and intangible assets. Put another way, the book value is the shareholders' equity, or how much the company would be worth if it paid of all of its debts and liquidated immediately. It is also known as the written-down value.
References in periodicals archive ?
According to the report, if one adjusts for the exceptional expense of Rs 20 crore incurred in the December 2010 quarter on account of change in method of depreciation from written-down value method to the straight line method, then year-on-year profits have fallen by 7 per cent from Rs 122 crore to Rs 113 crore now.
When the car is sold, the difference between the tax written-down value of the car and the sale proceeds received can be set against company profits in the year of disposal and reduce the company's corporation tax liability.
Although much of the uncertainty associated with new car pricing has disappeared, the fall in values of used cars can severely restrict the growth plans of businesses, as companies can find themselves with assets worth less than their written-down value.
This gain represents the difference between the sales price of the Power-One shares and the written-down value at December 31, 2008 (based on original cost, the Company actually realized a gain on the sale of Power-One shares in the amount of $2,860,000, or $1,773,000 after tax).
The general technique can be used for many other calculations--for instance, working out the written-down value of an asset or the outstanding balance, interest and repayments for a loan.