Book value (also known as net asset value) is a way of measuring a business’s value or worth (valuation) using its tangible assets by taking the value of a business’s material assets minus its liabilities. Since book value does not include intangible assets, such as goodwill, the resulting book value is often less than the fair value or real value of a business.
Under general accounting principles, “book value” has a standard definition, namely a company’s assets over its liabilities.
[Last updated in June of 2021 by the Wex Definitions Team]