04 March 2017
Book value is a measure of all of a company's assets: stocks, bonds, inventory, manufacturing equipment, real estate, etc. In theory, book value should include everything down to the pencils and staples used by employees, but for simplicity's sake companies generally only include large assets that are easily quantified
For Manufacturing companies depreciation can affect book value. The resale value for equipment usually goes down faster than a company is required to depreciate it under accounting rules.
In case of Financial assets which are not prone to depreciation, the Mark-to-Market (MTM) rules can overstate book value during bull market & understated during bear market. This impact book value of a company.
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