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Is The book value of a fixed asset reported on the balance sheet represents its market value on that date?
It is false that the book value of a fixed asset reported on the balance sheet represents its market value on that date. Fixed assets are also known as tangible assets.
When determining the value of a fixed Asset and a rebate was given do you reduce the value of the the fixed asset or book at a true cost?
If the company are using cost basis to value their assets then the rebate will reduce the cost.
Depreciation is a process of cost allocation and not valuation What does this mean?
Depreciation spreads the cost of a fixed asset over the useful life of that asset so a portion of that cost is recognized as an expense in each period that the asset is in service. The original cost, less the accumulated depreciation is the net book value of the asset. The net book value may not represent the actual market value of the asset. Depreciation is not concerned with the market value but rather the value of the contribution that the asset makes to the business.
Why market price of share differ from book value?
market value is based on demand for the asset, whereas book value is based off the asset's depreciation rate (BV= cost - accumulated deperciation) which is determined by useful life and salvage value. (cost-salvage rate/life)
Can you depreciate below the residual value using the declining-balance method?
No, you cannot depreciate an asset below its residual value using the declining-balance method. This method calculates depreciation based on a fixed percentage of the asset's book value each year, but it should stop once the book value reaches the residual value. Continuing to depreciate below this threshold would not accurately reflect the asset's true value.
The net book value of a fixed asset is determined by?
Capitalized Cost minus Accumulated Depreciation
Is The book value of a fixed asset reported on the balance sheet represents its market value on that date?
It is false that the book value of a fixed asset reported on the balance sheet represents its market value on that date. Fixed assets are also known as tangible assets.
The book value of a plant asset is?
The book value of a fixed asset (PP&E) is the difference between the fixed asset account and it's related accumulated depreciation account. You have a truck you paid $25,000 and you have depreciated it for the amount of $10,000 then the "book value" would be $15,000.
When determining the value of a fixed Asset and a rebate was given do you reduce the value of the the fixed asset or book at a true cost?
If the company are using cost basis to value their assets then the rebate will reduce the cost.
What is the book value of a fixed asset?
The original cost of the item less accumulated depreciation for the item. And The gross book value is the original/historical price paid for an asset, without a depreciation deduction.
What is the estimated salvage value of a fixed asset?
1. Estimated salvage value is the amount which is expected to be received from disposal of fully depreciated asset after useful life of asset.
Depreciation is a process of cost allocation and not valuation What does this mean?
Depreciation spreads the cost of a fixed asset over the useful life of that asset so a portion of that cost is recognized as an expense in each period that the asset is in service. The original cost, less the accumulated depreciation is the net book value of the asset. The net book value may not represent the actual market value of the asset. Depreciation is not concerned with the market value but rather the value of the contribution that the asset makes to the business.
Why market price of share differ from book value?
market value is based on demand for the asset, whereas book value is based off the asset's depreciation rate (BV= cost - accumulated deperciation) which is determined by useful life and salvage value. (cost-salvage rate/life)
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.
Can you depreciate below the residual value using the declining-balance method?
No, you cannot depreciate an asset below its residual value using the declining-balance method. This method calculates depreciation based on a fixed percentage of the asset's book value each year, but it should stop once the book value reaches the residual value. Continuing to depreciate below this threshold would not accurately reflect the asset's true value.
What is Book value vs fair value?
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
What is revaluation of plant assets?
A plant asset is an asset such as land, buildings, and machinery that will be useful for more than one year and is used to help produce revenues for a business. Plant assets are also known as fixed assets. Revaluation of plant/fixed assets is the process of increasing or decreasing their carrying value in the event of major changes in the fair market value of the assets.
