Above Water

AAA

DEFINITION of 'Above Water'

1. Refers to the condition of a company's asset when its actual value is higher than the book value used in its financials.

2. Financially referring to a person staying out of economic trouble or a company remaining financially viable.

INVESTOPEDIA EXPLAINS 'Above Water'

1. Generally, the book value of an asset listed in a company's balance sheet cannot be adjusted according to Generally Accepted Accounting Principles (GAAP). Should the asset appreciate, its market value would be "above water". A company with above water assets tends to attract value investors. This is because of the hidden value that most investors won't discover if they don't look beyond the financials. For example, if a company purchased a piece of land for $100,000 and the company later discovered an oil reserve on the property, the market value of the land would increase and be above water, because the book value would remain at $100,000.

2. Used in the context of "keeping their head above water" symbolizing the ability to stay alive. For example, company XYZ kept its head above water with an increase in profit even though its revenue dropped.

RELATED TERMS
  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Amortization

    1. The paying off of debt in regular installments over a period ...
  3. Goodwill

    An account that can be found in the assets portion of a company's ...
  4. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  5. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
  6. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
Related Articles
  1. Fundamental Analysis

    Understanding Pro-Forma Earnings

    These figures can either shed light on a company's performance or skew it. Find out why.
  2. Personal Finance

    Can You Count On Goodwill?

    Carefully examine goodwill and its sources before considering the value of your investment.
  3. Markets

    Intangible Assets Provide Real Value To Stocks

    Intangible assets don't appear on balance sheets, but they're crucial to judging a company's value.
  4. Investing

    What's the difference between bottom-line and top-line growth?

    A company's bottom line is its net income, or the "bottom" figure on a company's income statement. More specifically, the bottom line is a company's income after all expenses have been deducted ...
  5. Investing

    What does it mean to be "above water"?

    The term "above water" is used to describe any situation in which the ending or current value of a subject is higher than its beginning or opening price. In accounting, an asset with a value ...
  6. Delivery duty paid (DDP) is a shipping term.
    Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  7. Fundamental Analysis

    What is a good interest coverage ratio?

    Learn the importance of the interest coverage ratio, one of the primary debt ratios analysts use to evaluate a company's financial health.
  8. Fundamental Analysis

    What is a bad interest coverage ratio?

    Understand how interest coverage ratio is calculated and what it signifies, and learn what market analysts consider to be an unacceptably low coverage ratio.
  9. Active Trading Fundamentals

    What is liquidity risk?

    Learn how to distinguish between the two broad types of financial liquidity risk: funding liquidity risk and market liquidity risk.
  10. Technical Indicators

    What is a good gearing ratio?

    Understand the meaning of the gearing ratio, how it is calculated, the definition of high and low gearing, and how they reflect relative financial stability.

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center