Using net book value as an investment base is consistent with the amount of total assets shown in the conventional balance sheet.

Question

Quizplus · Accepted Answer

Net book value is calculated by subtracting the accumulated depreciation from the original cost of an asset. This is the same as the amount of total assets shown in the conventional balance sheet, which is the original cost of the assets minus the accumulated depreciation.

Using Net Book Value as an Investment Base Is Consistent