- (book value) The value of the assets indicated in the accounts of the company. This value may be initial (in purchase prices) or established as a result of periodic revaluation of assets. Accounting for assets book value… … Economic dictionary
Book value- companies are defined as follows: total assets minus intangible assets and liabilities such as debt. The book value of a company may be lower or higher than its market value … Investment dictionary
- (Enterprise value (EV), Total enterprise value (TEV) or Firm value (FV)) is an analytical indicator that is an assessment of the value of a company, taking into account all sources of its financing: debt obligations, preferred shares, ... ... Wikipedia
Book value- - the cost of long-term assets (object, fixed assets of an enterprise, firm) included in the balance sheet and recorded in the balance sheet. It is calculated as the initial cost of acquiring, creating an object for which it was entered in ... ... Commercial power industry. Dictionary-reference
book value- the cost of the object, fixed assets of the enterprise, firm (long-term assets) included in its balance sheet, recorded in the balance sheet. It is calculated as the initial cost of acquiring, creating an object for which it was entered in ... ... Dictionary of economic terms
- (book value) The value of the asset according to the organization's books. This is usually the initial cost of acquiring the asset less the amount written off for depreciation. If the value of an asset has ever been revalued, ... ... Financial vocabulary
Book value Encyclopedia of Law
book value; net asset value, book value- (fixed assets, funds) (1) The carrying value of the assets shown on the balance sheet according to their price at the time of purchase. The cost of, for example, manufacturing equipment decreases every year as depreciation is deducted from ... ... Financial and investment explanatory dictionary
The cost of long-term assets (object, fixed assets of an enterprise, firm) included in its balance sheet, recorded in the balance sheet. It is calculated as the initial cost of acquiring, creating an object for which it was entered in ... ... Encyclopedic Dictionary of Economics and Law
Book value- (eng. balance cost) 1) B.s. an asset (less often liabilities and equity items) as the initial cost of a long-term asset less accumulated depreciation; in a broader sense, the value of this asset, taking into account the decrease in the balance ... ... Big Law Dictionary
To have an idea of the real financial condition of the enterprise, you should analyze its assets and the sources of their occurrence. Such an assessment can be carried out in different ways based on the goals: put the property on record, reflect it in the accounts, charge taxes, etc. financial statements types of property of the company are presented in monetary terms. To maintain accurate accounting at the enterprise, you should know the rules for determining the balance sheet.
To produce products and carry out other activities, the enterprise uses the means of labor. It can be buildings and other real estate, equipment, machines, vehicles etc. Such property is called the fixed asset (OS) of the enterprise and has the following characteristics:
The book value of fixed assets is understood as the cost at which they are reflected in the corresponding line balance sheet. Distinguish between the initial book value of fixed assets and the residual value. Let's consider each in more detail.
Fixed assets are accepted for accounting at their original cost, excluding VAT and other reimbursable taxes. Its calculation is influenced by how the company received the asset.
When buying an OS, it includes:
If the company produces a fixed asset on its own, its initial assessment includes the costs that the company actually incurred to manufacture it.
There are situations when an asset is difficult to value. For example, an organization receives it under a donation agreement or as a result of a barter transaction. In such a situation, the property is accounted for at the current market price of this or similar objects.
The initial book value of fixed assets is calculated once and is not changed further, except in some cases:
The enterprise has the right not more often than once a year to re-evaluate its assets and record them on the balance sheet at current (or replacement) cost. Such a revaluation is carried out both upwards and downwards (revaluation and devaluation, respectively). Recalculation must be done at market prices, if supporting documents are available, or by indexation.
The property already owned by the enterprise is valued in the balance sheet at its residual value. To calculate it, it is necessary to subtract the amount of depreciation accrued on the fixed asset object from the initial assessment.
If the enterprise carried out a revaluation, in this case the book value of the property will be equal to its replacement cost minus the accrued depreciation.
To determine the amount of depreciation, use different ways specified in the legislation. The simplest is the linear method.
During the initial registration for accounting, each fixed asset is calculated for the period beneficial use. In order to correctly determine it, it is necessary to decide which depreciation group includes property according to the OS Classifier.
Depreciation is charged starting from the next month after the month when the property was actually put into operation. Depreciation is not charged on land, water and other Natural resources. A complete list of such property is specified in Art. 256 of the Tax Code of the Russian Federation.
Tip: You should always check current changes in legislation for correct bookkeeping. OS accounting is regulated, for example, Tax Code and PBU 6/01.
Consider what is the book value of fixed assets for specific example calculation. Suppose, in March, an enterprise purchases equipment for 2,260,000 rubles, including VAT - 18%. All additional costs (for example, delivery to the site and installation) are included in the contract. In this case, the property is taken into account at the price of the contract, excluding VAT, that is, the initial assessment will be 2 million rubles.
Suppose for this group of equipment in accounting policy The enterprise uses the straight-line method of depreciation. When registering the OS, the accountant assigned the equipment to group 3. The term of use of the property is 50 months. It turns out that every month depreciation in the amount of 40,000 rubles (2,000,000 / 50) will be charged on equipment.
In April next year, the residual balance price of the purchased equipment after 11 months of operation will be 1,560,000 rubles (2,000,000 - (20,000 * 11)).
An assessment of fixed assets in monetary terms is necessary not only for maintaining accounting, but also for calculating some coefficients and indicators financial condition enterprises.
The carrying amount of fixed assets is used in calculating such financial indicators, how:
So, in some forms statistical reporting required to indicate the book value of fixed assets. In addition to the amount of fixed assets, this indicator may take into account intangible assets.
The value of the company on the balance sheet is determined by the total assets of the company, taking into account the deductions of its intangible assets and other liabilities indicated in the balance sheet. Often the book value of the company differs significantly from the market price.
To assess the productivity of the enterprise, a balance is calculated, which reflects the assets and liabilities of the company. Moreover, assets are divided into current and fixed assets. Taking into account the former, as a rule, there are no problems, but the latter, which have been used for many years, are difficult to assess.
With regard to working capital, as a rule, there are no problems, but fixed assets that have been used for many years are difficult to assess.
For this purpose, accountants refer to the term "book value". By this, accountants understand the value of long-term assets that have been entered into the balance sheet and noted in the corresponding statement of the company. Long-term assets include the objects of the firm, or rather, their value.
The balance valuation of fixed assets is visible at the initial cost, from which the total depreciation is calculated. And the initial cost itself is expressed in the costs that were incurred for the construction (delivery, installation, construction costs).
The carrying amount may be reduced by the amount of depreciation rates. If borrowed funds were spent on the acquisition, then the interest on the loan must be taken into account in the calculations.
To avoid confusion, the value of the company on the balance sheet is assessed annually. This figure can vary due to many factors. Expenses for repairs and reconstruction, maintenance, etc. Numerous nuances sometimes make the process of counting an unbearable burden, so only accounting professionals can accurately calculate such a balance.
As mentioned above, the balance sheet and enterprises almost always differ. Often the second is many times greater than the first. This is due to the following.
If the book value is estimated solely from a material point of view, by the number of assets, then the market value includes the balance sheet and material parts. For example, the presence of a wide client base, popularity and recognition of the brand or brand are also taken into account when determining the market price of the enterprise. This explains the significant difference in numbers.
The book value is useful if an organization needs to take a loan secured by property. In this case, lenders will be guided only by the value of fixed assets, and not by the brand as a whole. Also, the indicator becomes important when closing a company and dividing capital for distribution among the founders or payments to creditors.
The book value of fixed assets is important indicator accounting reporting. Consider where it is used and what types of calculation are.
Attention! Companies are required to pay property tax on their fixed assets. Correctly determine the amount of tax and successfully report on it will help you:
In accounting, property is considered a fixed asset if its useful life is more than 12 months. Another an important factor is the nature of its use (clauses 4, 5 PBU 6/01).
OS includes:
Such objects are, for example:
The BukhSoft program will take into account an object of fixed assets of any complexity. Operations and documents comply with all legal requirements. Try for free:
Register OS posting online
In accounting, an object can have all the features listed above, and its initial cost can be equal to or less than 40,000 rubles. A specific limit is fixed in the accounting policy for accounting purposes. At legislative change limit, the new value is applicable only to newly accepted for accounting objects (letter of the Ministry of Finance dated 10.01.2012 No. 07-02-06 / 3).
In tax accounting, fixed assets are considered property or part of it (clause 1, article 257 of the Tax Code of the Russian Federation):
Items with a useful life of more than 12 months are depreciated. But if their cost is 100,000 rubles or less, they are not depreciated. It is written off as material expenses (paragraph 1 of article 256, subparagraph 3 of paragraph 1 of article 254 of the Tax Code of the Russian Federation).
The book value of fixed assets is their residual value. It is calculated by subtracting the amount of depreciation accrued on it from the initial cost of the object.
The BuhSoft program automatically sets the useful life of any fixed assets, calculates depreciation on them and makes postings for its accrual. Calculate the depreciation rate for free:
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The book value of a property is an indicator that will differ from its market value.
The book value of an object consists of the costs actually incurred by the company or individual entrepreneur for its purchase, construction or manufacture.
When determining the market value, factors of competition, supply and demand are taken into account.
We present three types of calculation of this indicator.
Book value = Original purchase price (construction, creation) - Depreciation accrued over the period of use
Average annual book value = (Carrying value as of 01/01/2019 + Carrying value as of 02/01/2019 + Carrying value as of 12/31/2019) / (12 + 1),
Average annual book value = (Book value at the beginning of the year + Book value at the end of the year) / 2
The book value of assets is the monetary value of all assets of the company, as reflected in the balance sheet. Let us consider in more detail how the book value differs from the residual and initial value, and also for which assets these concepts should be applied.
Any property belonging to the organization can be both tangible, that is, in kind, in the form of real estate, machines, tools, various equipment, and intangible form: investments in scientific developments, know-how, formalized patents. The cost of such property upon registration with the company consists of:
Formed in this way monetary value the company's property is the initial cost. In balance out current assets are reflected at the residual value, that is, the initial value minus the accrued depreciation for the entire period of operation. Answering the question, is the book value residual or initial, we can say that the book value is equal to the residual.
It is also necessary to distinguish between depreciable property, the value of which is not written off immediately, but during the useful life. This period must exceed 1 year, and current assets, whose value is repaid at a time. Working resources include:
Current assets do not relate to depreciable property and are reflected in the balance sheet at their actual acquisition cost.
The difference between these two concepts is in the amount of accrued depreciation, since, according to paragraph 49 of the Regulations on Accounting and Reporting, fixed assets are reflected in the balance sheet at residual value. The same goes for intangible assets in accordance with paragraph 57 of the same Regulations. Therefore, there is no difference between the concepts of book value and residual value, they are absolutely identical in Russian legislation. The tax legislation adheres to the same opinion.
There is also the concept of the replacement cost of property in the form of fixed assets and intangible assets. This is understood as the value of the property at market prices on the current date or calculated using specified inflation rates. The cost of fixed assets that were revalued by decision of the Government of the Russian Federation can also be a replacement cost. If the depreciable property was revalued, then it is reflected in the balance sheet at the replacement cost minus the accrued depreciation amounts.
The book value of the assets is equal to the residual value of non-current resources and the sum of the balance of current reserves in kind and in cash according to the accounting registers. The calculation of the book value is necessary to analyze the financial position of the enterprise, to determine the level of profitability of existing assets.
Determining the book value of assets is required to calculate the size of the transaction. A transaction is considered to be a major one if its amount exceeds 25% of the book value of all available assets of the firm. In the event of an incorrect calculation of balance sheet assets, the transaction may be declared invalid.
