Thanks. I revisit the curriculum and found the BB already has some explanation!
Book value in the price-to-book ratio reflects the value of equity that is reported on the company’s balance sheet. The denominator of equity q reflects the difference between the replacement cost of assets and the market value of liabilities. Most financial reporting standards require the use of acquisition cost as a measure of asset value. Thus, the book value of assets is typically less than their replacement cost, and this is particularly true during periods of rising prices. - BB