What is defined as the difference between the original purchase price and the accumulated depreciation?

The concept being described is known as book value. It represents the value of an asset as recorded on the balance sheet, calculated by taking the original purchase price and subtracting any accumulated depreciation. This measurement is crucial in financial accounting, as it provides insight into the asset's worth in a company's books, reflecting how much the asset has depreciated over time and what remains of its original value.

Book value is essential for internal assessment and external reporting, helping stakeholders understand the company's financial position and the value of its assets. Being distinct from net asset value, market value, and intrinsic value, book value focuses on accounting records rather than market perceptions or economic assessments. Thus, it serves as a foundational element in asset valuation and is particularly significant in accounting practices for businesses.