Book Value


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Related to Book Value: market value, Book value per share

Book Value

The current value of an asset. The book value of an asset at any time is its cost minus its accumulated depreciation. (Depreciation reflects the decrease in the useful life of an asset due to use of the asset.) Companies use book value to determine the point at which they have recovered the cost of an asset.

The net asset value of a company's Securities. This is calculated by subtracting from the company's total assets the following items: intangible assets (such as goodwill), current liabilities, and long-term liabilities and Equity issues. This figure, divided by the total number of bonds or of shares of stock, is the book value per bond or per share of stock.

The calculation of book value is important in determining the value of a company that is being liquidated. For example, if a corporation has 100,000 shares of stock issued and outstanding and its assets total $5 million and its intangible assets and all liabilities total $1.6 million, its net asset value is $3.4 million and its book value per share is $34.

book value

n. a determination of the value of a corporation's stock by adding up the stated value of corporate assets as shown on the books (records) of a corporation and deducting all the liabilities (debts) of the corporation. This may not be the true value of the corporation or its shares since the assets may be under- or over-valued.

References in periodicals archive ?
There is a common belief in the market that stocks that trade at less than their book values are perceived to be cheap, while stocks that trade way above their book values are deemed overpriced.
A stock may trade below its book value for several reasons, the foremost being lack of investor confidence in the company's future.
Although companies carefully underwrite the plans they insure and contracts exclude certain event risks to protect the insurer, we believe book value wraps expose insurers to substantial tail risk because they do not allocate sufficient capital to the business to cushion against potential losses in extreme adverse scenarios," Moody's Vice President and author of the report, Ann Perry said in a statement.
It plans to allow insurance firms to deduct the liabilities from the increment in their realty value and incorporate the remainder into their book value.
We demonstrate the persistence of the anomaly and rejecting the claim that the inclusion of book value of equity in the model eliminates the anomaly, for the high-tech sector.
Until 2009, taxpayers have three options available to allocate and apportion interest expense--the FMV method, tax book value method and alternative tax book value method.
Because book value is primarily used as a proxy for the replacement value of operating assets in place in the computation of future EVA, it is helpful to envision how book value fits into this formulation.
Tax Executives Institute appreciates this opportunity to present its views on the proposed regulations relating to the use of an alternative tax book value method for allocating and apportioning interest expenses under section 861 of the Internal Revenue Code.
In order to adjust the book value of the properties to the market value, write-downs will be required in the annual accounts for 2003.
If the RCC were obliged to buy the loans at effective book value, ''it would be tantamount to the government funneling large amounts of taxpayers' funds into banks,'' Aso said.
The results show that systematic differences in the importance of earnings and book value do exist across national boundaries.
The plan to buy bad loans at book value minus loan-loss reserves was initially proposed by RCC last year during the process of revising the Financial Reconstruction Law in order to help banks promote the disposal of nonperforming loans.