Another accouting question....?

Question

Are the amounts at which fixed assets are reported in the balance sheet their approximate market values as of the balance sheet data? Explain.

Answer 1

Fixed assets are first recorded at cost less accumulated depreciation, in accordance with IAS 16 Property Plant & Equipment. Then in accordance with IAS 36 Impairment of Assets, at each balance sheet date, you have to see if there are any indications that the asset has been impaired (its carrying amount may be in excess of the greater of its net selling price and its value in use). If so, you have to determine the impairment loss to be recognised. Subsequent to that, fixed assets would be stated at cost less accumulated depreciation, and less any accumulated impairment.

Once you've complied with the above, you'd have ensured that assets are carried at no more than their recoverable amount. (There are US GAAPs similar to the above IASs)

Answer 2

Fixed assets are reported at their original cost less the accumulated depreciation that has been recorded since the assets were acquired. Market values are not relevant because the assets are not held for resale. The idea is to report the amount of resources invested in the assets, and the portion of those assets used up.

This is one reason why book values of stocks are not the same as market values. A company may be reporting land at its original cost of $10,000, but the market value of the land may be $100,000

Answer 3

i think they are the purchase value - depreciation
for a normal balance sheet.
you only check market value when you are going to sell the company / value your goodwill

Answer 4

No, not always now find the rest of the answer to your homework yourself.