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Why does the book value of an asset never go below the residual value?
Wiki User
∙ 13y ago
Because of time value of money.
Wiki User
∙ 13y ago
smiles4u2
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What is the Meaning of nav?
Net Asset Value (NAV) represents a mutual fund's per share market value.
Full form of N A V?
Net Asset Value
Whats the definition of a business asset?
Business asset is a piece of property or equipment purchased for business use. It is also a personal property that has value which can be used for the payment of its owner's debt.
Which of these describes the term residual value?
f*** you learn how to answer my questions you dumb a** web site
What is the meaning of the abbreviation CFD?
CFD has two meanings.1. Computational fluid dynamics refers to "one of the branches of fluid mechanics that uses numerical methods and algorithms to solve and analyze problems that involve fluid flows" (Wikipedia).2. CFD also refers to Contacts for Difference which is a type of investment. "a contract between two parties, typically described as "buyer" and "seller", stipulating that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time. (If the difference is negative, then the buyer pays instead to the seller.)" (Wikipedia)
What is the meaning of Scrap Value in accounting?
scrap value is the residual value of an asset. the valu of an asset which exists after its estimated life period
is this true Residual value means the actual cash one receives at end of life of asset?
Residual value is the value of the asset that they are likely to recover at the end of the life of the asset. It is the value that is expected to be at the end. But its not necessarily that we realise the amount at the end of the period. It can be more or less than that.
What is the estimated salvage value of a fixed asset?
The estimated salvage value of a fixed asset refers to the expected residual value of the asset at the end of its useful life. It is an estimate of how much the asset could be sold for or its scrap value. This value is important for calculating depreciation expenses and determining the asset's net book value. The specific salvage value can vary depending on factors such as market conditions, technological advancements, and the condition of the asset.
Should you deduct resale value of an asset when calculating straight line depreciation?
Yes you should. That is also known as the residual value and you would minus that from cost and divide by the useful economic lifetime if the asset.
In Accounting what does Residual value mean?
Residual value estimates how much an asset is worth at the end of its productive life. This value is calculated by the lending institution prior to a lease or loan on an item. It is based on past and future predictions and is the key way of determining a payment schedule.
Can an asset be depreciated to the point where its value becomes negative?
That can never happen. An asset will either be depreciated to its salvage value, or to zero, depending on whether or not it has a salvage value.
Account depreciation reducing balance method find how to rate?
rate = 1 - (n * by the square root of R /C) * 100% Where: n = the number of years of useful life of the asset - R= the estimated residual value of the asset C= the cost of the asset
Jan 2 06 K acquired equipment for 260000 The estimated life is 5 yrs or 40000 hrs The residual value is 20000 What is the book value of asset on Dec 31 07 if K uses straight line method of depreciatio?
Value of asset: Cost price - accumulated depreciation annual depreciation = (260000-20000 ) / 5 = 48000 Value of asset = 260000 - (48000 *2) 96000 = 164000
What are the types of depreciation methods?
In financial accounting there are three types of depreciation methods:Straight-line = (cost-residual value)/useful life. This method is used when the asset generates revenues that are equal (or very close to equal) over its useful life.Diminishing balance = (cost-accumulated depreciation)*depreciation rate. This method is used when the asset's revenues decrease over its useful life.Units of production = (cost-residual value)*units used /total life units. This method is used when an asset generates revenues based on its measurable usage.
The book value of an asset is the same as market value of the asset?
Book value of an asset is the value which is shown in books of accounts while market value of asset is the value which is currently same asset is selling in market so both of these values are not same but it can be same but normally they are not same.
What is impairment cost?
When assets are recorded a company's balance sheet, they are valued at historical cost (what was paid for the asset), less any accumulated depreciation or amortization if applicable. This holds true even if the market value of the asset is considerably more than what the company paid for it. However, if the market value of a company's assets drops significantly below the asset's historical cost, then it sometimes becomes necessary to revalue the asset at the lower market value. This revaluation is called impairment. When it is appropriate to impair an asset depends on the type of asset in question. The difference between the current book value of the asset, and the value of the asset after impairment, is your impairment expense (cost).
When an asset is sold a gain occurs when the?
Gain on sale of asset is occured when actual value of asset is less then the sale value of asset.
