Definicja book value method (FI-LC)

A variant of consolidation of investments.

When the book value method is applied to the proportional or purchase methods of consolidation, the method eliminates hidden reserves (fair value adjustments) only up to the value that pertains to the corporate group.

The alternative to the book value method is the revaluation method.

When the book value method is applied to the equity method of consolidation, the investment item of the immediate parent company remains unchanged during first consolidation. Typically, the differential is then stated in the notes to the financial statements.