Carrying Value

AAA

DEFINITION of 'Carrying Value'

An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance sheet. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset. For a company, carrying value is a company's total assets minus intangible assets and liabilities such as debt.

Also known as "book value".

INVESTOPEDIA EXPLAINS 'Carrying Value'

This is different from market value, as it can be higher or lower depending on the circumstances, the asset in question and the accounting practices that affect them. In many cases, the carrying value of an asset and its market value will differ greatly. This is because, in accordance with accounting rules, the assets are held based on original costs. If a company holds land that was purchased 100 years ago, it holds it at the cost paid. Over time, however, this real estate has likely gained considerably in value.

RELATED TERMS
  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Amortization

    1. The paying off of debt in regular installments over a period ...
  3. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  4. Asset

    1. A resource with economic value that an individual, corporation ...
  5. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  6. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
Related Articles
  1. What's the difference between book and ...
    Investing

    What's the difference between book and ...

  2. Reading The Balance Sheet
    Investing Basics

    Reading The Balance Sheet

  3. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

  4. Advanced Financial Statement Analysis
    Options & Futures

    Advanced Financial Statement Analysis

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center