The going-concern principle supports the reporting of plant assets at book value rather than market value.

Question

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The going-concern principle assumes that a company will continue to operate indefinitely, so it is appropriate to report plant assets at their historical cost or book value rather than their current market value, which may be significantly higher or lower. This is because the market value can fluctuate due to economic conditions or supply and demand, but the book value is based on the actual cost incurred by the company to acquire the asset. Therefore, the going-concern principle supports reporting plant assets at book value rather than market value.

The Going-Concern Principle Supports the Reporting of Plant Assets at Book