Let me try to see if I can clarify the issues in this thread:
There are different understanding of Book Value, NAV and NTA. We usually say Book value is NAV and is Equity. But as usual the devil is always in the detail: Equity itself has several components, from reval reserves to retained earnings to paid up capital. NAV is the difference between Asset and Liability, but then Liability could have complex structures and contingencies as well. And NTA tries to deduct intangibles from calculation
But let's focus on this thing called Book Value. Book keeping is a very tedious and disciplined process. They record down the transactions studiously and keep the book in balance. So when we talk about book value of an asset in general we are talking about historical TRANSACTIONAL figures.
Intangible assets, RNAV and so forth to ESTIMATE the worth of a company is a financial reporting function. There is a difference.
If an asset say is fully depreciated we don't see it on the financial statements because it is zero on the balance sheet. But on the books it is actually recorded as $X contra by $X depreciation because the asset is still around in the company! Only when it is disposed or write off do we see the reversals on the depreciation charges together with the cost.
Information is lost when you simplify things.
Hence an asset could be underestimated in the financial statements because it is still a productive asset but reported as zero, yet still held in the books, or the depreciation achedule is overly conservative.
The second reason is that the asset has appreciated due to INFLATION (key issue why book value is almost always below market value) or real capital gains. That's where revaluation of the assets comes in. Revaluation itself is a
discretionary judgment.
Hence back to the original question: Should we look at Company or Consolidated? Few people realise that when we buy the listco we are actually legally buying the holding company level. Assets held under the company is booked under the transactional cost basis. So when we talk about RNAV of the holding company we have to reval the assets which includes the subsidiary or the associates. If they are listed it is based on the listing price but if not we will have to reval the subsidiary and associates... no simple task.
That also answers scottleey question on why the subsi is not liable for the holdco liabilities. The holdco has to fulfil their obligation by liquidating their holdings through sale or liquidation of their assets, of which the subsi and associates are.
That's why most of the time we only look at key assets and skip the tedious process, and sometimes we actually miss out jewels that are booked long ago and had depreciated on the financial statements.
However on the financial reporting part, we report on a consolidated basis so that we have a look-through into the subsidairy and associates. Holdco structure and consolidated basis both have their purposes, but don't mistake nor confuse one for the other.
They are not the same thing
Some thoughts on a Friday afternoon. Not sure if it is coherent
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Think Asset-Business-Structure (ABS)