To calculate the carrying value of an asset, what must be subtracted from the original cost?

The carrying value of an asset is typically calculated by taking the original cost and subtracting accumulated depreciation or amortization. This process reflects the asset’s reduction in value over time due to wear and tear or obsolescence.

Accumulated depreciation represents the total amount of depreciation that has been expensed against an asset since it was acquired, effectively accounting for its usage and lifespan. Similarly, amortization applies to intangible assets. By deducting this accumulated amount from the original cost, you arrive at the asset's carrying value, which provides an accurate reflection of its current worth in the balance sheet.

The other choices do not accurately impact the calculation of carrying value. Initial purchase expenses may be included in the asset’s original cost but do not need to be subtracted. Tax liabilities and operational expenses are not related to the carrying value of an asset; tax liabilities relate to future financial obligations and operational expenses relate to costs incurred during day-to-day business activities. Therefore, the correct understanding of carrying value hinges on the deduction of accumulated depreciation or amortization from the original cost.