Imputed Value - Explained
What is Imputed Value?
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
Table of ContentsWhat is Imputed Value?How Does Imputed Value Work? Example of Imputed ValueAcademic Research on Imputed Value
What is Imputed Value?
An imputed value of an item should not be confused with the actual value. An imputed value is assigned to an item when the actual value is not known, hence, this value is realized based on an assumption or estimation of the actual value. An imputed value is otherwise called an "estimated imputation." When the true or actual value of an item is yet to be determined or unavailable, a guess can be made as to what the actual value would be to realize the imputed value. The imputed value is often logical and not entirely different from the actual value.
Back to: ACCOUNTING, TAX, & REPORTING
How Does Imputed Value Work?
Diverse situations give rise to imputed value, for instance, the unavailability of the actual value of an item might demand that an imputed value be given to the item to make certain decisions. In most cases, when companies need to make vital decisions about assets or items in the company and their true or actual values cannot determined, imputed value which is the assumed value of the items is used. Imputed values are logical values assigned to items. That is they are fair estimates or assumed values of items. The value of an historical item or an opportunity cost of an asset owned by a firm can attract imputed value. Imputed values have been used overtime and there are no problems with this.
Example of Imputed Value
This illustration is necessary for a better understanding of imputed value; A company can use imputed value in estimating the opportunity cost associated with investing in a project, especially one that has to do with using the firm's resources and assets. In this scenario, the actual cost of the project is not yet determined, so an imputed value is assigned to the opportunity cost. This assigned imputed value is in dollars, it is important in helping the company make vital investment decisions.
- Job Costing vs Process Costing
- Assign Direct Material and Direct Labor to Job
- Assign Manufacturing Overhead Costs to Job
- Assign Overhead Costs to Products
- Plantwide Cost Allocation
- Department Cost Allocation
- Activity-Based Costing
- Weighted-Average Cost of Products
- Production Cost Report
- Fixed, Variable, and Mixed Cost Estimations
- Contribution Margin Income Statement
- Cost-Volume-Profit Analysis
- Margin of Safety
- Contribution Margin per Unit of Constraint
- Absorption Costing vs Variable Costing
- Differential Analysis and Decisions
- Cost Decisions for Joint Products
- Capital Budgeting
- Life Cycle Costing
- The Master Budget
- Activity-Based Budgeting
- Standard Costs
- Imputed Value
- Variance Analysis for Product Costs
- Absorption Pricing
- Price Variance
- Absorption Variance
- Responsibility Centers
- Comparing Segmented Income
- Using ROI to Evaluate Performance
- Using Residual Income to Evaluate Performance
- Use Economic Value Added to Evaluate Performance
- Transfer Pricing