In a company that you work for,a building which cost $150,000 ten years ago now has a market value of $400,000.For financial statement purposes,what arguments would you put forward to convince your Chief Executive Officer that this building should be shown in the financial reports at its current market value?

Question

Quizplus · Accepted Answer

The Answer is The historical cost of $150,000 was a fair value of the building 10 years ago.This value does not recognise the current value of the building,which is $400,000.The adoption of the current market value (which must be certified by qualified valuers)ensures that assets in the Balance Sheet are not underestimated and therefore reflects the fair values for those assets.

In a Company That You Work For,a Building Which Cost