Amount at which an asset or liability is reported on the balance sheet after the relevant accounting adjustments.
Carrying amount is the amount at which an asset or liability is reported on the balance sheet. It starts from the recorded basis and then reflects adjustments such as depreciation, amortization, impairment, repayments, premiums, or discounts, depending on the item.
Many important accounting judgments are made by comparing carrying amount with some other measure such as recoverable amount, fair value, or expected settlement amount. If carrying amounts are wrong, both the balance sheet and related profit measures become misleading.
For depreciable or amortizable assets, carrying amount is often original cost less accumulated depreciation, accumulated amortization, and impairment losses. For liabilities, carrying amount is the reported obligation after repayments and any required measurement adjustments.
Readers often use the phrase net book value for assets. In formal reporting, carrying amount is usually the cleaner term because it can be applied to both assets and liabilities.
A company reports two balances at year-end:
| Item | Basis | Adjustments | Carrying Amount |
|---|---|---|---|
| Patent | 120,000 | 45,000 accumulated amortization | 75,000 |
| Note payable | 200,000 face amount | 12,000 unamortized discount | 188,000 |
Both amounts are carrying amounts because they are the figures reported on the balance sheet.
Carrying amount is not automatically the same as market value. It is also broader than net book value, because liabilities have carrying amounts too even though they are not usually described with asset-oriented language like net book value.