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An asset's initial book value is its actual cash value or its acquisition cost. Cash assets are recorded or "booked" at actual cash value. Assets such as buildings, land and equipment are valued based on their acquisition cost, which includes the actual cash cost of the asset plus certain costs tied to the purchase of the asset, such as broker fees.
Revaluation does not mean only an upward revision in the book values of the asset. It can also mean a downward revision (also called impairment) in the book values of the assets. However, any downward revision in the book values of the assets is immediately written off to the Profit and Loss account.
The CMUCPP model is chosen by hardly any accountant in non-hyperinflationary economies even though it would automatically maintain the real value of constant real value non-monetary items, e.g. issued share capital, retained income, other shareholder equity items, trade debtors, trade creditors, etc., constant for an unlimited period of time in ...
Adjusted net book value may be the most relevant standard of value where liquidation is imminent or ongoing; where a company earnings or cash flow are nominal, negative or worth less than its assets; or where net book value is standard in the industry in which the company operates. The adjusted net book value may also be used as a "sanity check ...
In the Canadian tax system the term Adjusted cost base (ACB) refers to the cost of an investment adjusted for several tax-related items including acquisition costs. [1]
If the fair value is less than carrying value (impaired), the goodwill value needs to be reduced so the carrying value is equal to the fair value. The impairment loss is reported as a separate line item on the income statement, and new adjusted value of goodwill is reported in the balance sheet. [10]
The price-to-book ratio, or P/B ratio, (also PBR) is a financial ratio used to compare a company's current market value to its book value (where book value is the value of all assets minus liabilities owned by a company). The calculation can be performed in two ways, but the result should be the same.
Cost of goods sold (COGS) is the carrying value of goods sold during a particular period.. Costs are associated with particular goods using one of the several formulas, including specific identification, first-in first-out (FIFO), or average cost.