ADJUSTED COST BASE ACB

An income tax term that refers to the change in an asset's book value resulting from improvements, new purchases, sales, payouts or other factors. An adjusted cost base can be calculated on a single or a per unit basis.

The book value can be adjusted because of a change or improvement made to the asset. The new adjusted cost base is then used to compute the gain or loss when it is sold. In some jurisdictions, the adjusted cost base must be used as the cost of the asset for capital gains purposes.