Brake horsepower
Brake horsepower (abbreviated bhp) is the measure of an engine's horsepower without the loss in power caused by the gearbox, generator, differential, water pump, and other auxiliary components such as alternator, power steering pump, muffled exhaust system, etc. "Brake" refers to a device which was used to load an engine and hold it at a desired RPM. During testing, the output torque and rotational speed were measured to determine the "brake horsepower". Horsepower was originally measured and calculated by use of the indicator (a James Watt invention of the late 18th century), and later by means of a De Prony brake connected to the engine's output shaft. More recently, an engine dynamometer is used instead of a De Prony brake. The output delivered to the driving wheels is less than that obtainable at the engine's crankshaft.
[edit] British horsepower
The acronym bhp may also be used for British horsepower, which has the same definition as the American SAE gross brake horsepower: 33,000 lb·ft/minute. More information on American SAE horsepower measurements is below.
Effective (true, wheel) hp
Effective horsepower (EHP), True horsepower (thp) or wheel horsepower (whp) is the power converted to useful work. In the case of a road vehicle this is the power actually turned into forward motion as measured on a chassis dynamometer. Power available at the road is generally 10% to 20% less than the engine's bhp rating due to "coastdown" losses, most of which are due to the vehicle's rubber tires rather than true transmission losses. Front-wheel drive cars (provided a transverse engine layout is used) suffer slightly lower coastdown losses due to the absence of the bevelled crown and pinion gears used to change the drive direction in the back axle of a RWD car [14].
Source: http://en.wikipedia.org/wiki/Horsepower