What is Book Value ?
“Book Value” shown on your IGSI accounts includes reinvested dividends and does not necessarily reflect the Adjusted Cost Base for tax purposes. It does not include the effect of any pending transactions applicable to the accounts. The book value of mutual funds not purchased through IGSI reflects their fund company’s book value, unless otherwise arranged. The book value of other investments not purchased through IGSI reflects their market value on the date IGSI received them, unless otherwise arranged. All prices and market values are based on available information, but can vary from actual prices and market values. This is particularly relevant for bonds, strip bonds, other fixed income securities, and thinly traded securities. Call IGSI for an actual bid before selling.
When dealing with stocks, analysts often will want to know the book value of the common stock. Essentially, the book value has to do with the calculated worth of the company’s common stock as of the most recent balance sheet. There are several elements that go into calculating the current book value which make the information necessary in a number of different applications. The initial book value of any asset is either the cash value of the asset, or the acquisition cost. Cash assets, of course, are not subject to depreciation. Buildings, land, and operating equipment would tend to be valued based on the acquisition cost initial, with the understanding that the total cost of acquisition includes both the purchase price and any other expenses associated with the acquisition, such as broker fees or other types of processing fees. Over time, there are factors that will impact that initial book value. Depreciation of some assets will mean that the actual cash value may temporarily be lower
Book Value is the amount you paid to purchase units or shares of a security (commissions are also factored in where applicable). This value can be obtained by multiplying the number of shares by the average unit cost of the securities purchased. Subsequent purchases and sales of a security will result in adjustments to the total Book Value. 2) Does Book Value include commission? Yes. Book Value does include commissions charged where applicable. 3) The Book Value information on my account statement/online is not accurate. How do I correct it? If you need to update the information you can easily update online. Instructions to update Book Values Online: From the Accounts Section • Go to the Holdings page. • Click on the Update Book Value button. • Select the position(s) for which you want to update the Book Value(s) by clicking in the box(es) beside the holding(s). Click Continue. • Enter the new Book Value(s) for the position(s) selected. Click Continue. • Verify your entry and click on
The book value, or net tangible assets, of a company refers to liquidation value of their assets if they were forced to sell everything. The book value of a company can be derived through the balance sheet by using the following formula: Assets – Liabilities – Intangible Items (Patents, Trademarks, Goodwill, etc.) – Preferred Stock Subtracting intangible assets is what differentiates book value from shareholders equity; it represents the true cash value of liquid, tangible assets of the company. You may ask then, why is the stock worth more than book value? Book value is only one component of stock price; others include earnings estimates, intangible items, and investor sentiment (as we have seen in the crash of 2008 where hedge funds deleveraged their portfolios by selling securities at any cost). When markets become fearful, bargains will present themselves; however, a bargain may be there for a reason. Always understand the fundamentals of the company; a couple key gauges to look at
