Editing Book value (section)

===Depreciable, amortizable and depletable assets===
Monthly or annual [[depreciation]], [[amortization (accounting)|amortization]] and [[depletion (accounting)|depletion]] are used to reduce the book value of assets over time as they are "consumed" or used up in the process of obtaining revenue.<ref>Meigs and Meigs, ''Financial Accounting'' 4th ed. p. 90.</ref> These non-cash expenses are recorded in the accounting books ''after'' a [[trial balance]] is calculated to ensure that cash transactions have been recorded accurately. Depreciation is used to record the declining value of buildings and equipment over time. Land is not depreciated. Amortization is used to record the declining value of intangible assets such as patents. Depletion is used to record the consumption of natural resources.<ref>Wolk, Harry I., James L. Dodd and Michael G. Tearney (2004). ''Accounting Theory: Conceptual Issues in a Political and Economic Environment'', 6th ed. South-Western. pp. 330–331. {{ISBN|0-324-18623-1}}.</ref>

Depreciation, amortization and depletion are recorded as expenses against a [[contra account]]. Contra accounts are used in bookkeeping to record asset and liability valuation changes. ''Accumulated depreciation'' is a contra-asset account used to record asset depreciation.<ref>Meigs, p.91</ref>

Sample [[general journal]] entry for depreciation<ref>Meigs, p.90</ref>
* Depreciation expenses: building... debit = $150, under expenses in retained earnings
* Accumulated depreciation: building... credit = $150, under assets

The balance sheet valuation for an asset is the asset's cost basis minus accumulated depreciation.<ref>Meigs, p.105</ref> Similar bookkeeping transactions are used to record amortization and depletion.

"Discount on notes payable" is a contra-liability account which decreases the balance sheet valuation of the liability.<ref>Meigs, p. 313</ref>

When a company sells (issues) [[bond (finance)|bond]]s, this debt is a [[long-term liability]] on the company's balance sheet, recorded in the account Bonds Payable based on the contract amount. After the bonds are sold, the book value of Bonds Payable is increased or decreased to reflect the actual amount received in payment for the bonds. If the bonds sell for less than [[face value]], the contra account Discount on Bonds Payable is debited for the difference between the amount of cash received and the face value of the bonds.<ref>Hermanson, Roger H., James Don Edwards, R. F. Salmonson, (1987) ''Accounting Principles'' Volume II, Dow Jones-Irwin, p. 657. {{ISBN|1-55623-035-4}}</ref>