A company gradually uses up or expenses the cost of a fixed asset over the assets useful life. How Book Value of Assets Works. When it reaches the end of its useful life the NBV should be equal to its salvage value.
Alternatively Book Value can be calculated as the sum total of the overall Shareholder Equity of the company.
As you can see in the example above all assumptions or hardcodes are in blue font and all formulas are in black. A company gradually uses up or expenses the cost of a fixed asset over the assets useful life. From there market capitalization and net book value can be calculated. Use depreciation for tangible items like computers machinery furniture and so on.