What does the term 'Net Book Value' refer to?

Net Book Value refers to the value of an asset after accounting for accumulated depreciation. It is calculated as the initial cost of the asset minus the total depreciation that has been recorded against it over time. This figure provides a more accurate representation of the asset's current worth on the company's balance sheet, as it reflects the reduction in value due to wear and tear, obsolescence, or usage.

Understanding Net Book Value is important for both financial reporting and assessing the value of an enterprise's assets. It helps stakeholders, including investors and analysts, evaluate how much an asset is actually worth in the context of the company's financial position.