Book Value

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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 ?
The book value of a company refers to how much the company will be worth if it liquidated its assets and paid all its liabilities.
Summary: Book value represents that part of the accounting value of a business that will be left after debts are paid off.
7 billion, based on the total book value of domestic banks reaching NT$2.
1999) hypothesize and find that including book value of equity in the simple earnings capitalization model eliminates the negative relation.
RCC) buy collateral-backing bad loans held by banks at effective book value.
The Difference measure, which is a measure of the difference in the relative valuation weight of earnings and book value, is used to examine the relative importance of the earnings and book values.
These stocks trade at about 50 percent of book value,'' compared with a more typical valuation of four to five times book value, said Jeff Herr, who trades unlisted stocks at Chicago Corp.
If an asset is disposed of for less than book value, a realized loss will be recognized.
The applicable insurance fund is equivalent to book value plus liability reserve fund of an insurance firm.
Some lawmakers in the ruling Liberal Democratic Party have floated the idea of enabling RCC to buy bad loans at their effective book value rather than market value to accelerate the disposal of such loans.
Asset valuation assumes the market price of a stock selling below its book value will rise toward this value if the book value reflects the true current value of the assets, whether appreciated or depreciated.
With certified vehicles for sale at no-haggle prices below Blue Book values, auto2auto.