Which statement best characterizes the book value concept?

The book value concept is fundamentally tied to how assets are recorded on a company's balance sheet. Specifically, it represents the historical cost of an asset, adjusted for any accumulated depreciation or amortization. This means that while the initial amount paid for the asset is recorded, over time, the value of the asset is reduced to account for wear and tear, obsolescence, or usage, effectively reflecting its net value to the company.

When considering the other options, they do not align with the essence of book value. For instance, estimating future cash flows pertains more to present value calculations and forecasting rather than the historical cost principle. Insights into current market value would relate more to the fair value concept, which can fluctuate based on various factors that book value does not take into account. Similarly, fair value suggests an appraisal of what an asset might sell for in the current market, rather than adhering to the cost basis established at acquisition.

Therefore, the statement that best characterizes the book value concept is that it shows the historical cost of an asset after depreciation, as this succinctly encapsulates the methodology of arriving at book value and its fundamental nature in accounting.