Book value (BV),
Definition of Book value (BV):
The value of a security or asset as entered in a firms books.
Liability: Full amount (par value) of a liability less sums already paid. Also called basis value or carrying value.
Firm: Net worth of a firm reflected in its balance sheet as owners (shareholders) equity. It is computed by adding up all (equity and debt) capital invested since the firms inception and deducting all liabilities. As in the case of the capital assets, the BV of a firm usually bears little or no resemblance to its true or market value.
Common stock: Amount that shareholders would (in theory) receive for each share if the firms assets were sold (liquidated). Computed by dividing BV of the firm by the number of shares held by the shareholders (outstanding shares).
Capital asset: Written down value of an asset as shown in the firms balance sheet. BV is computed by deducting accumulated depreciation from the purchase price of the asset. Because, according to the provisions of GAAP, an assets BV cannot show any increase or decrease in the assets market value, it rarely reflects the assets true worth.
How to use Book value (BV) in a sentence?
- I decided to keep my car until it was fully paid off. After 3 years of driving it I realized even though it was in prime condition the trade in value was not at all close to the book value and Id be better off selling it outright once it was paid in full.
- By comparing the companys market value to its book value, investors can in part determine whether a stock is under or over-priced.
- When selling a car you should check out its book value and hope to get as close to that as you can.
- Our book value for the asset read negative, however the asset was clearly usable so we figured to have profited on this asset.
Meaning of Book value (BV) & Book value (BV) Definition