Book value. Basic concepts

To assess the effectiveness of the company(production enterprise), a document is drawn up, such as a balance sheet. It reflects the ratio of assets and liabilities of the enterprise. In turn, assets are divided into fixed assets and current assets. Accounting for working capital usually does not cause problems, but the main ones, used repeatedly over a number of years, can sometimes be difficult to assess. For the procedure of their evaluation, such a concept as the book value is used.

What it is? In accounting, this term denotes the value of long-term assets that are recorded in the balance sheet and recorded in the company's balance sheet. Under long-term assets is understood the value of the company's object.

The company's book value is equal to its costso-called. net assets, that is, the value of total assets after the deduction of debts (total liabilities). To evaluate it, the concepts of initial, recovery and inventory value are used.

The carrying amount of property, plant and equipmentis recorded at historical cost, from which the accumulated depreciation is deducted. The initial cost consists of the costs of erecting or constructing these facilities and the costs of delivery and installation.

The replacement cost is applied when accountingfixed assets for which the revaluation was carried out as of 01.01.1960. It is this value, determined upon reassessment, that is included in the balance sheet. The fixed assets, the acquisition or construction of which was conducted at the expense of capital investments, are accounted for by inventory value. Gratuitously received objects are accounted for by the documents of the transferring party (including the costs of the recipient for the installation, if necessary). At the actual cost are reflected in the balance of raw materials, fuel, spare parts, finished products. Low-value, (quick-wearing) items - at the original cost (their wear - a separate article in the passive).

The procedure for determining the initial costis determined by legislation and depends on the method of acquisition of these funds (construction, manufacturing, donation, barter exchange, share contribution, transfer to trust management). The carrying amount of the funds that have just arrived at the enterprise is usually equal to their original value. Most often, it consists of the costs of acquiring the facility and putting it into operation.

In all subsequent reporting periods, the balance sheetthe value is reduced by the amount of losses incurred and accumulated depreciation. In addition, if borrowed funds were used to purchase the fixed asset, then payment of interest on the loan for the reporting period should be taken into account.

Mandatory reassessment is carried out annuallyfixed assets. Their book value can change during operation under the influence of many different factors: changes in market value, repair and reconstruction costs, maintenance, etc. The cost of funds is affected by operating conditions - environmental aggressiveness, duration of use, number of shifts, processes inflation. All this sometimes makes the definition of book value a task that is feasible only for highly qualified specialists.

The value of the company's shares can be calculateddifferently. The nominal value declared upon the issue of shares is determined by the size of the shareholder's share in the charter capital. The nominal value of shares is almost not used, since immediately after the issue they begin to be sold at the issue price (emission), which is higher than the nominal value.

In the financial statements of the enterprise, the book value of the share appears. It is equal to the ratio of the value of its net assets to the number of shares issued.

The value of assets is determined in a uniform for allaccording to the instructions of the Ministry of Finance. In this case, there may be a discrepancy between the norms calculated according to the instruction and the actual market value. A more realistic indicator is the market value of one share, equal to the market value of assets divided by the number of shares. In addition, there is a liquidation value of shares - when determining it, the liquidation value of assets is taken into account, that is, the value for which the assets of the enterprise can be sold in case of bankruptcy. Estimating such a cost is a necessary step in planning large investments in order to forecast possible risks.