True false the halfyear convention assume that assets are placed in service or disposed of at the end of the year. Undepreciated definition, to reduce the purchasing value of money. The book value reflects the undepreciated original cost. Residual value is the estimated value of a fixed asset at the end of its lease term or useful life. Nov 30, 2019 a fixed asset is written off when it is determined that there is no further use for the asset, or if the asset is sold off or otherwise disposed of. Its important to note that the book value is not necessarily the same as the fair market value the amount the asset could be sold for on the open market. Essentially, an assets book value is the current value of the asset with respect to the. Depreciation reflects the decrease in the useful life of an asset due to use of the asset. Consolidated total asset value means, for any date of calculation, the sum of a the appraised value of all borrowing base properties as of such date, b cash and cash equivalents set forth on the balance sheet of the parent, c for all other assets or persons that are consolidated with the parent for financial reporting purposes, the greater of i the undepreciated gaap book value of such. 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 or carrying value is the net worth of an asset that is recorded on the balance sheet.
In accounting, book value refers to the amounts contained in the companys general ledger accounts or books. Book value is the net asset value nav of a companys stocks and bonds. Book value is strictly an accounting and tax calculation. It is important to realize that the book value is not the same as the fair market value because of the accountants historical cost principle and matching principle. Undepreciated capital cost ucc is the taxation term equivalent to the accounting term net book value and is the amount against which future cca can be claimed. The cca rate is the maximum rate that can be applied to assets in that class in each year. It is equal to the cost of the asset minus accumulated depreciation. Depreciated book value law and legal definition uslegal. Definition of book value in accounting, book value refers to the amounts contained in the companys general ledger accounts or books. Consolidated total asset value legal definition of.
To determine if you are eligible to claim cca, see can you claim cca. Definitions of undepreciated book value onelook dictionary. Information and translations of book value in the most comprehensive dictionary definitions resource on the web. Helping business owners understand valuation approaches det norske said it would finance the deal with existing funds and undrawn debt facilities and that it would benefit from premiers carryforward tax losses, undepreciated tax balances and exploration tax refunds equalling. Reports second quarter 2019 results but the undepreciated remaining historical costs of the. Depreciated book value means the cost price of the personal property acquired less the depreciation set up on the books in a regular and consistent manner for reflecting such depreciation, including a reasonable allowance for obsolescence. Then youd divide the net assets by the number of shares of common stock, preferred stock, or bonds to get the nav per share or per bond. Undepreciated capital cost how is undepreciated capital. Undepreciated book value per share is a nongaap book value metric which adds accumulated depreciation and amortization back to book value to present an adjusted book value that incorporates the.
Value definition in the cambridge english dictionary. Value definition is the monetary worth of something. Book value is often used interchangeably with net book value or carrying value, which is the original acquisition cost less accumulated depreciation, depletion or amortization. Book value is also the net asset value of a company calculated as total assets minus intangible assets patents, goodwill and liabilities.
Definition of undepreciated from the collins english dictionary. Gross book value legal definition of gross book value by law insider. An assets book value is equal to its carrying value on the balance sheet, and companies calculate it by netting the asset against its. An asset is considered capital if it has a useful life of more than one year and isexpected to be used to generate revenue over time. Capitalized property value means, as of any date, the aggregate sum of all property ebitda for each such property for the prior four quarters and capitalized at the applicable capitalization rate, provided, however, that if the value of a particular property calculated pursuant to this clause is less than the undepreciated book value of such property determined in accordance with gaap, such. Undepreciated capital cost ucc is the balance of the capital cost left for further depreciation at any given time. Depreciated cost is the value of a fixed asset minus all of the accumulated depreciation that has been recorded against it.
Carrying value definition, formula how to calculate carrying. Capitalized property value legal definition of capitalized. Fair market value lpp listed personal property rfl restricted farm loss ucc undepreciated capital cost adjusted cost base acb usually the cost of a property plus any expenses to acquire it, such as commissions and legal fees. The book value of a company is the total value of the companys assets, minus the companys outstanding liabilities. In addition to removing the assets cost and accumulated depreciation from the books, the assets net book value, if it has any, is written off as a loss. The carrying value of the capitalasset on the balance sheet represents the total cost less depreciation to date.
The cost of a capital property is its actual or deemed cost, depending on the type of property and how you acquired it. Undepreciated definition and meaning collins english dictionary. Book value represents the remaining undepreciated investment on the books after the depreciation charges to date have been subtracted. A question mark next to a word above means that we couldnt find it, but clicking the word might provide spelling suggestions. After 5 years the undepreciated capital cost would be zero. People often use the term net book value interchangeably with net asset value nav, which refers to a companys total assets minus its total liabilities. 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. Apr 09, 2009 the undepreciated cost of an asset is referred to as. The fact that book value is nowhere defined within the article and needs to be asked about on the talk page is a symptom. Net remaining undepreciated cost net book value net remaining. Book value is a key measure that investors use to gauge a stocks valuation. Apr 16, 2020 depreciated cost is the value of a fixed asset net of all accumulated depreciation that has been recorded against it. How do you calculate if you have a balance sheet in front of you.
The amount of cca you claim each year will lower the ucc of the property. Book value is the term which means the value of the firm as per the books of the company. Undepreciated definition of undepreciated by the free. Taxes, installment fee, purchase price, testing fees, everything charge prior to use. Information and translations of undepreciated in the most comprehensive dictionary definitions resource on the web. They discussed the value of having cameras in the courtroom. 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 cost price of the personal property acquired includes. If a company disposes of sells a longterm asset for an amount different from the amount in the companys accounting records its book value, an adjustment must be made to the net income shown as the first amount on the cash flow statement. In other words, we can say it is equal to the book value of an asset because it is not.
Our analysis leads us to conclude that the taxpayer always obtains undepreciated capital costs. The sale price would find its way back to cash and cash equivalents. Book value definition, the value of a business, property, etc. The provisions in the concession agreement that concern in the event of the agreement not being extended the compensation for the remaining book value of the as yet undepreciated investments that avr had made during the period covered by this agreement with the consent of the state must similarly be. Definition of book value in accounting, book value refers to the amounts. Whether youre in search of a crossword puzzle, a detailed guide to tying knots, or tips on writing the perfect college essay, harper reference has you covered for all your study needs. Companies use book value to determine the point at which they have recovered the cost of an asset. Learn the words you need to communicate with confidence. You can look up the words in the phrase individually using these links.
Dec 14, 2018 the book value of an asset is the value of that asset on the books the accounting books and the balance sheet of the company. Here we discuss definition, formula, examples and types of carrying value. Book value is calculated by subtracting any accumulated depreciation from an assets purchase price or historical cost. The value of an asset after its useful life is complete is measured by. Improve your vocabulary with english vocabulary in use from cambridge.
The depreciation expense would be completed under the straight line depreciation method, and management would retire the asset. Finding the nav involves subtracting the companys short and longterm liabilities from its assets to find net assets. Useful life length of time the asset is expected to be productivitly used in a companys operations. Book value definition of book value by merriamwebster. The financial accounting term book value refers to the original cost of. Apr 08, 2014 1 its the amount of the capital investment that you have not yet depreciated, or expensed on your income statement. Net book value is the value at which a company carries an asset on its balance sheet. The book value of an asset at any time is its cost minus its accumulated depreciation. Difference between net book value and undepreciated. The book value of an asset is the value of that asset on the books the accounting books and the balance sheet of the company. The undepreciated cost of an asset is referred to as.
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