If a company were going to pledge its capital assets to a bank as collateral for a loan, which method of valuing the assets would be more useful to the bank?

Question

Quizplus · Accepted Answer

Fair value is more useful to the bank because it reflects the current market value of the assets, which is what the bank would likely be able to sell the assets for in the event of a default on the loan.

If a Company Were Going to Pledge Its Capital Assets