When a plant asset is acquired by the issuance of a public company's common shares, the cost of the plant asset is properly measured by the
A) market value of the plant asset.
B) original cost of the plant asset.
C) book value of the plant asset.
D) book value of the shares.

Question

Quizplus · Accepted Answer

When a plant asset is acquired by the issuance of a public company's common shares, the cost of the plant asset is properly measured by the market value of the plant asset. The market value of the asset gives a fair value assessment of the asset and its worth, and therefore, it is the appropriate measure of its cost.

When a Plant Asset Is Acquired by the Issuance of a Public