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Home Resources Glossary Book Value

M&A Glossary

Book Value

The value at which an asset is carried on the balance sheet, usually calculated by subtracting accumulated depreciation from the original cost of the asset.

See Also

Adjusted basis, depreciation, market value.

Tips

Book value can also refer to all of the company’s assets minus all of the company’s liabilities. Book value is not to be confused with market value. Book value is strictly used for accounting or tax purposes, whereas market value refers to the value of the company in the marketplace, not for accounting purposes.

Related M&A Terms

Bad Faith

Intentional dishonesty or misleading someone by entering into an agreement without the intention or means to fulfill it. Tips There is an implied covenant of good faith in M&A transactions,...

Basket

The minimum threshold amount that must be met before a seller becomes liable for the buyer’s losses caused by the seller’s breach of representations and warranties (reps & warranties). See...

Best Efforts

A legal term that obligates the parties to make their best attempts to accomplish an objective outlined in a contract. Example "The buyer will use its best efforts to obtain...

Bill of Sale

The document with which ownership of the assets of a business are transferred from seller to buyer if the sale is structured as an asset sale. See Also Closing, purchase...

Board of Advisors

A group of individuals, typically composed of technical and industry experts, who provide guidance and feedback to the company’s managers and board of directors. See Also Board of directors. Tips...

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