Beginning Market Value (BMV)

  

Categories: Accounting

The value of an asset at the start of a time period (i.e., stocks at the start of a trading session or real estate upon appraisal).

Hans wanted to impress his neighborhood crush, Gertrude, who liked German cars. So he went to visit a buddy who sold knock-off merchandise like "Lewis Vuittoon" bags and "Tug Hewer" watches and bought a BMV (similar to a BMW but with minor logo tweaks) for $2,000 (its beginning market value).

Turns out Gertrude is more of a Volkswagen fan, so Hans returned the car the next day, receiving its ending market value of $500 (because of depreciation), which then becomes the next day's beginning market value.

Related or Semi-related Video

Finance: What is Fair Market Value?3 Views

00:00

Finance a la shmoop what is fair market value? double bubble toil and trouble [Man casting a curse]

00:09

what is the fair price of this pile of rubble so this term revolves around the

00:16

notion of fair like what is fair and by the way who told you the world was fair

00:22

anyway all right but financially fair or at least fair market means what the

00:28

market will fairly and legally pay for an asset that's fair and so that means [Man discussing financial fair]

00:35

fair as in not cash from a Somalian warlords leather briefcase but rather

00:42

fair as in the legitimate selling price of this excellent two-bedroom three-bath

00:46

shoebox in Palo Alto selling for 3 million dollars today for something to

00:52

be "of fair market" the buyer has to be knowledgeable and

00:57

unpressured i.e the somalian warlord does not in fact have a gun aimed

01:02

at the buyers head or any other body part and generally speaking [Gun aims at buyers body parts]

01:06

the market itself has to be a legitimate market like real estate or jewelry or

01:10

stocks or bonds or whatever if it's an illegitimate market well it's a probably

01:15

wondering why it was born out of wedlock so you can't do that

01:18

when you assess fair market value things have to be legal and liquid and well

01:23

fair whatever the market will pay for it that's the fair value [Hand dealing out cash]

Up Next

Finance: What is Assessed Value?
6 Views

What is Assessed Value? Assessed value is used to determine a piece of real estate’s tax liability. An assessor measures what the property is wor...

Finance: What is a Future Value calculation?
7 Views

What is a Future Value calculation? Future Value is used to find the value of an investment at some point in the future based on expected growth or...

Finance: What is Net Asset Value (NAV)?
5 Views

NAV isn't a cool new navigation app...it's how mutual fund shares are valued or priced at the end of each trading day.

Finance: What is terminal value?
0 Views

Terminal value is the end value of...something. In finance, it usually refers to the cash flow of a company that is sold, and that flow...stops flo...

Find other enlightening terms in Shmoop Finance Genius Bar(f)