Return on Software: Maximizing the Return on Your Software Investment

Book Value

The book value of an asset is the tax authorities' best estimate, based on depreciation accounting, of that asset's actual value. Another way of looking at book value is that it's the part of the asset's acquisition cost that hasn't been charged off by depreciation accounting. Remember, however, that the book value may not be the asset's actual value. The actual value can't be known for certain unless or until the asset is sold or scrapped. If the company paid $1 million for a high-performance computer and had depreciated it by $100,000 each year for 4 years (using straight-line depreciation), the book value in the fifth year is $600,000. The computer may or may not actually be worth $600,000 at that time, but the organization won't ...