An accurate financial picture is key to making good decisions for the future.
Part of this picture is understanding the value of the assets within your organization and how usage and time affect this figure.
Unlike cash holdings, the value of physical assets like machinery, equipment, vehicles, and buildings fluctuates over time.
Some assets may appreciate, but most lose value as time goes on. Keeping an accurate estimate of this decline is central to accounting accuracy.
Enter Net Book Value (NBV).
This method of estimating the value of tangible and intangible assets gives Finance the most accurate figures for tracking value over time.
It can be used to give context to your financial reporting. It can also help accounting accurately forecast future value and expenditures.
Today we’ll cover everything you need to know about net book value.