kirjanpitoarvoarvo

Kirjanpitoarvoarvo, often translated as book value or carrying value, refers to the value of an asset or liability as recorded on a company's balance sheet. This value is determined by accounting principles and historical cost, rather than current market conditions. For assets, the book value is typically the original cost minus accumulated depreciation, amortization, or impairment charges. For liabilities, the book value usually represents the amount owed.

The book value of a company as a whole, also known as net asset value or shareholders' equity, is calculated by subtracting total liabilities from total assets. This figure represents the theoretical amount that would be distributed to shareholders if the company were liquidated and all its assets were sold at their book values and all liabilities were paid off.

It is important to distinguish book value from market value. Market value is the price at which an asset or company could be sold in the open market, which is influenced by supply and demand, future earning potential, and other economic factors. In many cases, especially for publicly traded companies, the market value can significantly differ from the book value. Book value provides a historical perspective on an investment, while market value reflects its current worth. Investors and analysts use both book value and market value to assess a company's financial health and investment potential.