a mutual fund is an entity which primarily owns "financial assets" or capital assets such as bonds, stocks and commercial paper. the net asset value of a mutual fund is the market value of assets owned by the fund minus the fund's liabilities. this is similar to shareholders' equity, except the asset valuation is market-based rather than based on acquisition cost. in financial news reporting, the reported net asset value of a mutual fund is the net asset value of a single share in the fund. in the mutual fund's accounting records, the financial assets are recorded at acquisition cost. when assets are sold, the fund records a capital gain or capital loss.