What is the term for the value at which an asset is listed on a balance sheet, calculated as cost minus accumulated depreciation?

The term that refers to the value at which an asset is recorded on a balance sheet, calculated by taking the original cost of the asset and subtracting any accumulated depreciation, is known as book value. This concept is crucial in accounting because it helps assess the value of an asset as it relates to its use within a business over time.

Book value provides a clear snapshot of how much of the asset's value remains after accounting for wear and tear or obsolescence. It does not consider market dynamics or potential selling price, which are factors involved in fair value and market value, respectively. Goodwill value pertains to intangible assets and is not related to the physical depreciation of tangible assets.

Understanding book value is essential for evaluating a company's financial health and asset management efficiency, and it plays a significant role in investment decisions and financial reporting.