Simple rate of return

(redirected from Book Value Method)

Simple rate of return

The return from investments figured by dividing income plus capital gains by the amount of capital invested. The effect of compounding is not taken into account.

Simple Rate of Return

An estimate of the return on an investment. It is calculated simply by finding the investment's profit before taxes and interest expenses. The simple rate of return is easy to calculate but is not always accurate because it considers the investment's profit rather than cash flow. It also does not take into account the effects of compounding. It is also called the accounting rate of return or the book value method.

Mentioned in ?

References in periodicals archive ?

An often-overlooked significant event is the use of the tax book value method (or alternative tax book value method) of apportioning interest expense under Sec.

Foreign corporation earnings and profits: common misconceptions and pitfalls

The adjusted book value method usually renders a value higher than reported book value.

Hey, partner, we need a buy-sell agreement

For determining the values by Adjusted Book Value method we have proceed to the net asset accounting correction, based on data from year n, by discounting the historical costs of non-current assets taking as a basis for discounting exchange ratio ROL / USD, obtaining the results from Table 3.

Convergences and divergences in the system of valuation methods

It clarifies that for vehicles a taxpayer is leasing on 1st April 2006, they will be required to use the cost method to calculate the FBT liability without the option to use the book value method.

New rules for company fleets: two major players in the fleet market outline recent changes made to the FBT regime and their impact

Some modifications of the book value method include the tangible book value method, which basically includes only assets, such as cash, inventory, equipment, and real estate.

Understanding buy-sell agreements

Department of the Treasury and Internal Revenue Service issued temporary and proposed regulations under section 861 of the Internal Revenue Code, relating to the use of an alternative tax book value method for allocating and apportioning interest expense.

Section 861: adoption of alternative tax book value method for depreciation expense: September 17, 2004

The book value method is based on the idea that a firm's value can be found in the reported net worth of its underlying assets (Kam, 1986).

Accuracy of appraisers and appraisal methods of closely held companies

It is more practical than the book value method and, according to the Uniform Partnership Act (UPA), is the preferred method if no buyout clause has been established in the original partnership agreement.

Partnerships: if there's a beginning... ...there's an end

861-9(i) provides for the election of the alternative tax book value method.

Allocation and apportionment of expenses for Sec. 199 purposes: for many taxpayers, calculation of the Sec. 199 deduction will require an enormous amount of work. This article focuses on one aspect of the deduction, the allocation and apportionment of expenses under the Sec. 861 regulations and the proposed Sec. 199 regulations

Furthermore, there is an alternative FBT calculation method proposed, known as the Book Value Method.

Check points from the Forum: Sean Willmot reports from September's Fleet Forum 2005 conference on the latest mobile workplace legislation and the state-of-the-play on FBT

In the book value method, the company's valuation is deemed equal to the book value of the net assets at the date of the valuation.

What's a business worth? Valuation methods for accountants

A 10 percent or more corporate partner uses the parthership's inside basis in the partnership assets when using the tax book value method for apportioning interest expense.