The value of an organization's assets as carried on the balance sheet in
accordance with generally accepted accounting principles (GAAP). The book value
for real and personal property is typically the original cost of the property
less depreciation. The amount deducted for depreciation is calculated mathematically
and may not relate to the actual condition of the property. Since book value
is based on the original purchase price and an arbitrary depreciation schedule,
it should never be relied on to establish insurable values. See also
cash value; Replacement cost coverage.