What Is Adjusted Present Value (APV)?
Adjusted Present Value (APV) is a valuation method within Corporate Finance that assesses a project or company's value by separating its operational value from the financial effects of its funding. Essentially, APV calculates the Net Present Value of an investment as if it were financed solely by equity, and then adds or subtracts the present value of various financing side effects63, 64. These side effects primarily include the benefits of tax deductions on interest payments, known as the Tax Shield, but can also account for costs of Financial Distress, issuance costs, or financial subsidies61, 62. The Adjusted Present Value approach offers a detailed view of how financing decisions contribute to or detract from an entity's overall value.
While the term "Adjusted Consolidated Present Value" is not a standard, widely recognized financial valuation method, the principles of Adjusted Present Value (APV)123, 456, [759, 60](https://www.accountingtools.com/articles/adjusted-present-value)[8](https://corporatefinanceinstitute.com/resources/valuation/adjusted-present-value-apv/)[9](https://www.marcelodelfino.net/files/Note_on_adjusted_present_value.pdf)[10](https://www.wallstreetprep.com/knowledge/apv-adjusted-present-value/)[11](https://www.marcelodelfino.net/files/Not[57](https://tiomarkets.com/en/article/adjusted-present-value-guide), 58e_on_adjusted_present_value.pdf)12[13](https://corporatef[55](https://www.ceopedia.org/index.php/Adjusted_present_value), 56inanceinstitute.com/resources/valuation/adjusted-present-value-apv/), 14, 15161718, 19202122, [23](https://www.graduatetutor.com/corporate-finance-tuto[48](https://corporatefinanceinstitute.com/resources/valuation/adjusted-present-value-apv/), 49, 50ring/other-valuation-topics/adjusted-present-value-drawbacks-apv/)24[25](https://www.wallstreetpre[46](https://tiomarkets.com/en/article/adjusted-present-value-guide), 47p.com/knowledge/apv-adjusted-present-value/), 262728293031, 323334[35](https://www.wallstreetprep.[42](https://corporatefinanceinstitute.com/resources/valuation/adjusted-present-value-apv/), 43, 44com/knowledge/apv-adjusted-present-value/)36, 3738[39](40, 41https://www.wallstreetprep.com/knowledge/apv-adjusted-present-value/)