A companys common stock equity as it appears on a balance sheet, equal to total assets minus liabilities, preferred stock, and intangible assets such as goodwill. Strictly, the value of an asset shown in the companys accounts its books, but often used to mean the amortized purchase price similar to the us statutory accounting as distinct from the market value. The value of an asset as reflected on the books and records of a company,taking into account the original book cost of acquisition and then deducting depreciation expenses charged over the years and adding capital expenditures. Book value of an asset is the value at which the asset is carried on a balance sheet and calculated by taking the cost of an asset minus the accumulated depreciation. The monetary amount by which an asset is valued on a companys balance sheet, a figure not necessarily identical to the amount the asset could bring on the open market. Growth means a funds stocks tend to be more expensive relative to book value.
Book value helps you understand how much everything is worth right now if you suddenly need to liquidate or are just applying for a business loan. There may be exceptions to some of our definitions our main concern is to provide you with general concepts relative to commonly used book jargon. This is a quick, handy guide in no particular order to many of the terms that writers will come across during all stages of editing and publishing. Caterpillar tractor bought a smelting stove to melt iron at high temperatures. Book value is calculated by subtracting any accumulated depreciation from an assets purchase price or historical cost. This glossary is applicable to the international valuation standards and does not attempt to define basic valuation, accounting or finance terms, as valuers are assumed to have an understanding of such terms see definition of valuer. Book value definition of book value by the free dictionary. Book value is the value of a business asset as shown on the companys account books. Book value is a key measure that investors use to gauge a stocks valuation. Also refers to the amount of net assets belonging to the owners of a business based on the balance sheet values. Book value cambridge dictionary cambridge university press. Book value book value is the official value of a home or piece of real estate. Apr 17, 2019 book value per common share is a measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. What is a glossary in a book how to write a glossary for.
First edition in book collecting, the first edition is the earliest published form of a book. Definition of blue book value in the financial dictionary by free online english dictionary and encyclopedia. A companys book value might be higher or lower than its market value. This abbreviated glossary covers only the most commonly encountered terms. Book value is the value at which an equity or other capital asset or liability is recorded in the balance sheet of an entity. This may not be the true value of the corporation or its shares since the assets may be under or overvalued. Tradein value is an important term for consumers to know.
The dollar amount shown on the institutions accounting records or related financial statements. Book value, or net book value, is the term used to describe how much a business or asset is worth according to its financials. International glossary of business valuation terms june 08, 2001 to enhance and sustain the quality of business valuations for the benefit of the profession and its clientele, the below identified societies and organizations have adopted the definitions for the terms included in this glossary. The book value of a company is the amount of owners or stockholders equity. Change your default dictionary to american english.
Book value definition is the value of something as shown on bookkeeping records as distinguished from market value how to use book value in a sentence. Adjusted book value method a method within the asset approach whereby all assets and liabilities including offbalance sheet, intangible, and contingent are adjusted to their fair market values note. This sum could be different from the value reflected in the books. Book value per common share is a measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Blue book value meaning in the cambridge english dictionary.
The value of a companys net assets at amounts reported on its balance sheet. Its the value derived from a companys books or financial statements. The monetary amount by which an asset is valued on a companys balance sheet, a figure not necessarily identical to the amount the asset could bring. The performance of business valuation services requires a high. Historical cost replacement cost an interim adjusted price, which is not the current market price fair market value. The definitions in this glossary are those used by. Further, some investors and analysts look at the price of a stock in relation to its book value, which is provided in the companys annual report, to help identify undervalued stocks. An assets book value is the same as its carrying value on the balance sheet. Price to book value is a financial ratio used to compare a companys book value to its current market price. The price for which an item or service should be bought or sold, usually as related in a printed collection of. The buyback price was 38% below the stocks book value. He paid thousands more than blue book value for an old car from the dealership.
Search book value and thousands of other words in english definition and synonym dictionary from reverso. Book value definition canadian mortgage, insurance. Book value or carrying value is the net worth of an asset that is recorded on the balance sheet. Book value the value of an organizations assets as carried on the balance sheet in accordance with generally accepted accounting principles gaap.
Since companies are usually expected to grow and generate more. The book value of a company is the total value of the companys assets, minus the companys. Book value the value of an organizations assets as carried on the balance sheet in accordance with generally accepted accounting principles. Whether youre a student, an educator, or a lifelong learner, can put you on the path to systematic vocabulary improvement. Glossary definition and meaning collins english dictionary. Book value definition, the value of a business, property, etc. Companies use book value to determine the point at which they have recovered the cost of an asset. The insured value of the airplane was greater than its book value. Glossary some terminology that may be used in this page includes. Oecd glossary of statistical terms book value definition. Traditionally, a glossary appears at the end of a book and includes terms within that book that are either newly introduced, uncommon, or specialized. Meaning, pronunciation, translations and examples log in dictionary. An assets book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated depreciation.
Book value dictionary definition book value defined yourdictionary. Book value can reflect one of the following valuation methods. Book value can also refer to the value of an asset as listed a companys balance sheet. Language is power, and to that end we at the editorial department have come up with a glossary of commonlyused terms and abbreviations in the book publishing industry. International glossary of business valuation terms. Glossary international valuation standards council. The book value of an asset is its cost plus the amount it has appreciated, or minus the amount it has depreciated. Book value is an accounting term denoting the portion of the company held by the shareholders at accounting value not market value.
The value of individual asset as recorded in the accounting records of a taxpayer, calculated as actual cost less allowances for any depreciation. Blue book value financial definition of blue book value. Capital gain also known as capital appreciation, capital gain measures the increase in value of an asset over time. Book value definition is the value of something as shown on bookkeeping records as distinguished from market value.
Price to book ratio view financial glossary index definition. Search book value and thousands of other words in english cobuild dictionary from reverso. Book value refers to the total amount a company would be worth if it liquidated its assets and paid back all its liabilities. You can complete the definition of book value given by the english definition dictionary with other english dictionaries. A company often maintains separate sets of book values for tax purposes, solvency accounting, and stockholder. This is how much the company would have left over in assets if it went out of business immediately. Definition and synonyms of book value from the online english dictionary from macmillan education.
Get the definition of book value and understand what book value means in real estate. Book value dictionary definition book value defined. Book value meaning in the cambridge english dictionary. Definition book value the value of an organizations assets as carried on the balance sheet in accordance with generally accepted accounting principles gaap. A glossary of special, unusual, or technical words or expressions is an alphabetical. Book value may be more or less than current market value.
The book value of bonds payable is the combination of the accounts bonds payable and discount on bonds payable or. Adjusted net asset method see adjusted book value method. The gross book value of an asset is the value without consideration for adjustments such as valuation allowances. International glossary of business valuation terms to enhance and sustain the quality of business valuations for the benefit of the profession and its clientele, the below identified societies and organizations have adopted the definitions for the terms included in this glossary. State generally refers to a change other than a correction of a misprint. Book value may therefore vary significantly from other objectively determined values, most notably market value. The definitions in this glossary are those used by the ivsc within the current version of ivs. The value of individual asset as recorded in the accounting records of a taxpayer, calculated as act.
In business, the book value of an asset is the value it is given in the account books of. The current value of an asset based on the assets original purchase cost less any applicable depreciation, impairment or amortization costs. Book value legal definition of book value legal dictionary. This is the british english definition of book value. Capital profits are the difference between the book values of partnership assets and their market value. The value of a property, item or company as a capital asset based on its cost plus any additions, subtracting. An assets book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated.
The book value of an asset at any time is its cost minus its accumulated depreciation. Book value can also represent the value of a particular asset on the companys balance sheet after taking accumulated depreciation into account. The book value definition refers to a companys value or net worth that is recorded on its financial statement. Book value pershare value of shareholders equity, excluding goodwill and other intangible assets. Definition of the net book value the net book value is how much a fixed asset is showing as worth in your businesss accounts. The net book value is the book value net of such adjustments. The value or monetary worth of a property, item, or company as a capital asset based on its cost plus any additions, subtracting depreciation. When you buy a fixed asset for your business, you record the cost on your balance sheet, because thats what your business owns. Hopefully, our glossary will help you unravel some of the jargon used by book collectors and book sellers. Book value definition and meaning collins english dictionary. Depreciation reflects the decrease in the useful life of an asset due to use of the asset. Continuing with our series on back matter, todays blog is all about the glossary.
The value of a security on the day of purchase or the acquisition value. Book value definition of book value by merriamwebster. The net book value is how much a fixed asset is showing as worth in your businesss accounts when you buy a fixed asset for your business, you record the cost on your balance sheet, because thats what your business owns. A glossary, also known as a vocabulary or clavis, is an alphabetical list of terms in a particular domain of knowledge with the definitions for those terms. The market value of debt is the amount that an investor would be willing to pay for a companys debt. The amount is based on the original cost of the property plus any improvements that have been made minus any depreciation. Looking for help understanding commonly used book collecting terminology, or abbreviations and references used in book sellers descriptions.
The book value of a company is the difference between that companys total assets and total liabilities. Book value view financial glossary index definition. Using the book value calculation can show how much a business or asset is worth. The amount shown on a companys books for a particular asset or liability. Some of the terminology used in book collecting can be arcane, indeed. Sometimes called the idioticon, vocabulary, or clavis, the glossary is essentially a books personal dictionary. Book value is sometimes cited as a way of determining whether a companys assets cover its outstanding obligations and equity issues. Book value can be a guide in selecting underpriced stocks and is an indication of the ultimate value of securities in liquidation. The book value may understate current value or replacement cost. It is different from the market value but it often influences changes in market value. A companys total assets minus intangible assets and liabilities, such as debt.
Say that you originally purchased your home 20 years ago for a steal. A book that has been restored or worked on in order to increase its apparent value, this is often seen as a undesirable quality among collectors. Book value bv the value of individual assets, calculated as actual cost less allowance for any depreciation. The book value of equity of a company is the difference between its total assets and its total liabilities. A companys net asset value, which is calculated by total assets minus intangible assets and liabilities. You can complete the definition of book value given by the english cobuild dictionary with other english dictionaries. Short for electronic book, this is a computer file that contains the entire text of a book. Book value is the value of a single share of stock, calculated by dividing the value of the company by the number of shares it has issued. Book value is also the net asset value of a company calculated as total assets minus intangible assets patents, goodwill and liabilities. They were asked to pay about ten times the book value of the stock.
Book value rarely bears any relationship to the true value of assets. Book value per share financial definition of book value. Wikipedia, lexilogos, oxford, cambridge, chambers harrap, wordreference, collins lexibase dictionaries, merriam webster. Discover the definition of financial words and phrases in this comprehensive financial dictionary. Information and translations of book value in the most comprehensive dictionary definitions resource on the web. The book value of an asset is the amount of cost in its asset account less the accumulated depreciation applicable to the asset. The monetary amount by which an asset is valued on a companys balance sheet, a figure not necessarily identical to the amount the asset could bring on the.
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