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Book value is the value of asset shown in financial statements while fair value is the value at which asset can be sold in market
Book value of asset is the value of asset shown in books of accounts while fair value of asset is the current price at which that product is selling or sellable in market.
Gross Versus Net ValueFair market value is the price an asset would bring if it were sold on a voluntary basis, meaning neither buyer nor seller has an obligation to make the exchange. Gross fair market value is the fair market value of an asset before allowing for any liabilities such as loans, taxes or liens. Suppose a warehouse has a gross fair market value of $250,000. If the property is collateral for a $100,000 business loan, the net fair market value of the asset becomes $150,000.
NAV stands for Net Asset Value. The net asset value for any item is fair market value minus any outstanding loan costs. For example, a home with the fair market value of $100,000 and a loan balance of $75,000 has a NAV of $25,000.
Yes whenver old asset is utilized in business it is it's fair value which is used for depreciation purpose in business.
fair market value
Is it true the fair value of an asset retirement obligation recorded as an increase to the related asset and as a liability?
impairment is the decrease of fair value of an intangible asset where amortisation is periodic (usualy yearly) distribution of cost of an asset over its life. suppose a factory equipment worth 25000 and estimated life is 5 years, we will charge 25000/5=5000 /year on a straightline basis as amortisation. Now suppose with this equpment we can build something which required licencing...suppose the machine is used for making coca cola. To obtain the licence, the cost is 100,000. so the licence is an intangible asset. IAS reqires intangible ASSETS to be revalue atleast a year to see whether the fair value has increased/decreased. If the fair value is decreased from the cost/ carrying amount... we say the asset has impaired. And we record the value by which the asset has been impared. Note, Useful life has nothing to do with impairment. Fair value can be market value at the date of the impairment test.
no, it only accepts it once we take up fair values not the fair market values bcz somtimes market under value a perticular asset
Fair Value accounting is an accounting term that requires a company to place a value on all of the assets on its balance sheet that is the price at which the assets could be sold. This is easy to do when the asset has a quoted market price. But it is often the case that there is no liquid market for an asset, and thus the company has to make an estimate of fair value. When the marketplace is in turmoil and illiquid, as it has been for much of 2008, companies are sometimes forced to place a very low value on an asset, resulting in a substantial mark-down from the prior value. See related links for complete explanations.
Fair Value accounting is an accounting term that requires a company to place a value on all of the assets on its balance sheet that is the price at which the assets could be sold. This is easy to do when the asset has a quoted market price. But it is often the case that there is no liquid market for an asset, and thus the company has to make an estimate of fair value. When the marketplace is in turmoil and illiquid, as it has been for much of 2008, companies are sometimes forced to place a very low value on an asset, resulting in a substantial mark-down from the prior value. See related links for complete explanations.