Answer:

The correct answer is option 'B' - Book value.

The book value of an asset refers to the value of the asset after deducting depreciation from its historical cost. It represents the net value of the asset on the company's balance sheet.

Here is a detailed explanation of the answer:

1. Historical Cost:
The historical cost of an asset is the original cost incurred to acquire or produce the asset. It includes all costs necessary to bring the asset to its present condition and location.

2. Depreciation:
Depreciation is the systematic allocation of the cost of an asset over its useful life. It represents the decrease in the value of the asset over time due to wear and tear, obsolescence, or other factors.

3. Calculation of Book Value:
To calculate the book value of an asset, we subtract the accumulated depreciation from the historical cost. Accumulated depreciation is the total depreciation expense recognized over the life of the asset. The formula for calculating book value is:

Book Value = Historical Cost - Accumulated Depreciation

4. Significance of Book Value:
The book value is an important financial metric as it provides an indication of the worth of an asset after considering its depreciation. It represents the amount that would be recovered if the asset were sold at its current condition and market price.

5. Differences between Book Value and other values:
- Fair Value: Fair value is the estimated price at which an asset could be exchanged between knowledgeable and willing parties in an arm's length transaction. It may be higher or lower than the book value depending on market conditions.
- Market Value: Market value refers to the current price at which an asset could be sold in the market. It may or may not be the same as the book value.
- Net Realizable Value: Net realizable value is the estimated selling price of an asset less any selling expenses. It is typically used for inventory valuation and may not be applicable to all types of assets.

In conclusion, the value of an asset after deducting depreciation from the historical cost is known as the book value. It represents the net value of the asset on the balance sheet and is an important indicator of an asset's worth.