Future Business Leaders of America (FBLA) Accounting Practice Test

Assessed value specifically refers to the value determined by tax authorities for the purpose of calculating property taxes. This figure is crucial for local governments, as it establishes a basis for levying taxes on property owners. Unlike market value, which may fluctuate based on real estate trends and buyer demand, the assessed value is often a predetermined percentage of the market value or established through a set methodology by the taxing jurisdiction. This value ensures a consistent and fair means of taxation within that area.

In the context of property taxation, understanding assessed value is essential for property owners, as it directly influences the amount of tax they will owe. It is distinct from other terms such as market value or net book value, which serve different purposes in financial analysis and reporting.