The carrying value or book value of assets
A)is always the best measure of a company's value to an investor.
B)represents an average market value over time.
C)is always higher than the replacement cost of the assets.
D)is determined under GAAP and is based on the cost of the assets.
E)is determined under GAAP and is based on the current market value of the assets.

Question

Quizplus · Accepted Answer

The carrying value, also known as book value, of assets is determined under GAAP and is based on the cost of the assets. This cost includes any initial cost of acquisition, as well as any subsequent capital expenditures or improvements. This measure is used for financial reporting purposes and is not necessarily the same as the market value or replacement cost of the assets. While it is an important measure for financial reporting and accounting purposes, it may not be the best measure of a company's value to an investor.

The Carrying Value or Book Value of Assets