‘Carrying value’ is the original cost of an asset, less the accumulated amount of any depreciation or amortization, less the accumulated amount of any asset impairments. From the perspective of an entire business, you can consider carrying value to be the net recorded amount of all assets, less the net recorded amount of all liabilities. A more restrictive view that results in a lower carrying value is to also remove the recorded net amount of all intangible assets and goodwill from the calculation.

Carrying Value versus Market Value

The carrying value concept is only used to denote the remaining amount of an asset recorded in a company's accounting records - it has nothing to do with the underlying market value (if any) of an asset. Market value is based on supply and demand and perceived value, and so could vary substantially from the carrying value of an asset. For instance, a building may have been purchased many years ago and has since appreciated in value, while the owner has been depreciating it for a number of years; the result is a wide disparity between the carrying value and market value of the building.

Also, a business that engages in excellent equipment maintenance practices may find that the market values of its assets are significantly higher than those of a company that does not invest a sufficient amount in asset maintenance. The result can be a wide divergence between carrying value and market value for the same assets owned by different entities.

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