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Accounting B
Back freight
Backed note
Backward integration
Bad debt provision
Bad money drives out good
Bailee - see Bailment
Balance sheet
Balancing allowance
Balancing item
Bank loans and overdrafts, disclosure of
Barriers to entry
Barriers to exit
Barrister (UK)
Base Erosion and Profit Shifting (BEPS)
Basing-point pricing system
Batch production
Before-tax income
Below the line - see Above the line
Beneficial interest
Beneficial owner
Benefit cost-analysis
Benefit in kind
Bertrand competition
Betterment levy
Bid-ask spread (bid-offer spread)
Bill of lading
Bill of sale
Bill of sale, absolute
Bill of sale, conditional
Bill of sight
Bill of sufferance
Bills in a set
Bills payable
Bills receivable
Bin card
Blank bill
Board of directors
Boarding prevention officer
Bona fide
Bona vacantia
Bonded goods
Bonded lighterman
Bonded stores
Bonded vaults
Book keeping
Book value
Books of account
Bottom line
Bottomry bond
Brand loyalty
Brand recognition
Branded goods
Breach of warranty
Break-even chart
Break-even point - see Break-even chart
Break-up value
British Exporters Association
Broken stowage
Budget constraint
Budget controller
Budget line
Budgetary control
Buffer stock
Built-in obsolescence
Bulk cargo
Bundle of goods
Buoy dues
Business ethics
Business finance
Business saving
Business taxation - see Corporation tax
Buyer concentration
Buyer’s market

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Break-up value


Break-up value

An alternative to selling a business as a going concern is to sell it piecemeal, each asset separately. The value put on a business or a group of related assets break-up value and, in most instances, this break-up value and, in most instances, this will be the maximum amount realizable on disposal of those assets.
The term is also used in the context of valuing ordinary shares in a company. If there is no known value for shares, i.e. if they are not quoted on the Stock Exchange or on the Unlisted Securities Market and there is no figure at which they have recently changed hands, then they can only be valued either on the basis of estimated minimum earnings or on the break-up value of the assets they represent. This break-up value can only be an approximation and will be calculated by estimating the likely net realizable value of all assets, assuming they are disposed of individually in a free market, deducting from the total thus ascertained external liabilities and dividing the result by the number of shares. If there are shares which have priority of repayment over the ordinary shares, an adjustment must be made for amount applicable to those shares. The share value thus calculated is also sometimes known as the net asset value.

Reference: The Penguin Business Dictionary, 3rd edt.