What It Is:
Assessed value refers to the value of an asset -- usually real estate -- as determined by an assessor for tax purposes. The assessed value is often computed by incorporating the purchases and sales of similar properties in nearby areas.
How It Works/Example:
Why It Matters:
Although assessed value is a term used in conversations about property taxes, it is also an important factor in municipal bond issues. Because many municipalities receive a large portion of their local revenue from property taxes, the ratio of assessed value to net debt is an indicator of the quality of the bond issue.