Which of the following statements is correct?
A) The "net book value" or "Carrying amount" of a non-current asset reflects the market value of the asset.
B) The "net book value" or "Carrying amount" of a non-current asset is the cost of the asset, minus accumulated depreciation
C) The "net book value" or "Carrying amount" is the original cost of the asset
D) The "net book value" or "Carrying amount" cannot be calculated from a published Statement of Financial Position

Question

Quizplus · Accepted Answer

Net Book Value or Carrying Amout is what is shown on the published statement of financial position. Cost and depreciation will be shown in the notes; although not on an asset by asset basis. For a Sole Trader or Limited Company, all 3 values may be shown on the SoFP. Depreciation is an accounting method to spread the cost of the asset over the useful economic life of the asset. It is not intended to reflect market value, although adjustments may be made if it is felt that the "net book value" is unrealistic, and may have an effect on a shareholders decision...

Which of the Following Statements Is Correct