Mr Cooper Group Inc fka COOP

[rainbow1111]

Book value on the books generally is the purchase price of the asset. You asked,"Is the Book Value a value literally in the books so that it can be referenced for the price the asset was worth at the time of the purchase/sale?" Usually yes, if the sale had been at fair market value. Sometimes a person gets a really good deal. Maybe someone buys a car for $10,000 because it was a distressed sale, a sale between related parties, or someone doesn't know all the facts. Maybe the car was worth $20,000, but the buyer got it for $10,000 because the seller needed the cash now, or a parent wanted to give their kid a break.

Now I don't have all the details of the JPM purchase in front of me,and I don't have time to dig out the FS but as I recall the financial statement disclosures of JPM acknowledged that they got quite a deal. In the JPM financials, there is a disclosure that it was such a great deal that "negative goodwill" was generated. NOTE THAT NEGATIVE GOODWILL IS VERY UNUSUAL. This is the equivalent to buying a $30,000 car for $1! JPM, per GAAP, had to write down the values of some of the non-liquid assets (they used other terminology)to such a degree that they couldn't write down anything else (my words), so the excess was recognized on the income statement as an "extraordinary gain". The gain was recorded in 2007 and 2008. I'm saying that the extraordinary gain was not the total gain. This was just some of the gain because a lot of the gain was not shown in the financials bbecause it was subtracted from the non-liquid assets.

The book value of the WMI assets would have been much lower than fair market value likely. For example, WAMU owns multiple buildings purchased many years ago, maybe for $100,000 per building. In 2008, those buildings may be worth $700,000 each. These numbers are given for illustrative purposes only.

The FS says the stockholders' equity was a negative 1.3 billion. One could also start with that number and add the amount of the increase of each property over and above its book value. Also consider the difference between book value and FMV of all the assets that are buried in the subs. Then add goodwill (going concern value of a bank with over $300 billion in deposits), etc. Keep adding and you get a very large number.

For even more information see this link:
Fair Market Value For Business Valuations

http://www.nysscpa.org/cpajournal/2000/0500/departments/d57400a.htm