Accounting TERMINOLOGY BULLETINS
August, 1956 No. 3
Committee on Terminology American Institute of Certified Public Accountants 270 Madison Avenue. New York 16, N. Y.
1. The term book value is one of several widely used expressions in which the word value appears with a particular qualifying adjective to denote a particular concept of value. Book value is to be distin-guished from such terms as fair or market value or liquidating value, in that it refers to amounts reflected on accounting records and in financial statements.
2. The term book value is seldom if ever used in the body of financial statements, either as an indication of the basis of stating an item therein or in connection with owners' equities. To do so would involve a pointless truism and such use is therefore not recommended.
3. In Accounting Terminology Bulletin No. 1, the term value is defined as follows:
Value as used in accounts signifies the amount at which an item is stated, in accordance with the ac-counting principles related to that item. Using the word value in this sense, it may be said that balance-sheet values generally represent cost to the account-ing unit or some modification thereof; but sometimes they are determined in other ways, as for instance on the basis of market values or cost of replacement, in which cases the basis should be indicated in financial statements.