The valuation method that slowly reduces the stated amount of an asset over time, in a systematic fashion, is
A) Fair value
B) Replacement cost
C) Amortized cost
D) Historical cost

Question

Quizplus · Accepted Answer

The method described is amortization, which involves the systematic reduction of an asset's value over time. Fair value is the amount for which an asset could be sold or exchanged between knowledgeable, willing parties. Replacement cost is the cost of replacing an asset with a similar one. Historical cost is the original cost of acquiring an asset.

The Valuation Method That Slowly Reduces the Stated Amount of an Asset