2006-11-05 22:20:47 · 2 answers · asked by Stalwart 4 in Business & Finance ➔ Personal Finance
Normally we don't. But when the fair value of the asset is much lower than the original cost, it can be considered to re-value it.
Other situations depending on what industry you are in.
2006-11-05 22:26:02 · answer #1 · answered by linerak 3 · 0⤊ 0⤋
We can not price fixed assets according to their fair value because of depreciation. when a fixed asset is to be sold or bought, the buyer has to access the number of years it has stayed, the market value at start, the current market value, the depreciation value. take for example a second hand peugeot car '98 model which cost 1000 USDollars. at 10% depreciation. If the seller put the value at 500USDollars, it would be wrong for the buyer to buy at this price. the actuall price should be 200USdollars. the reason being that the vehicle has lasted long and should not be sold at the market value.
2006-11-05 22:53:17 · answer #2 · answered by Nnamsco 3 · 0⤊ 0⤋