A company was filing an insurance claim for capital assets damaged in a flood; which method of valuing the asset should they use?

Question

Quizplus · Accepted Answer

When filing an insurance claim for damaged capital assets, the company should use the replacement cost method of valuation. This method determines the cost to replace the asset with a new one of equal or similar utility. This is the most appropriate method in a situation where the asset has been damaged beyond repair and needs to be replaced.

A Company Was Filing an Insurance Claim for Capital Assets