The carrying value or book value of assets:
A)is determined under GAAP/IFRS and is based on the cost of the asset.
B)represents the true market value according to GAAP/IFRS.
C)is always the best measure of the company's value to an investor.
D)is always higher than the replacement cost of the assets.
E)None of the above.

Question

Quizplus · Accepted Answer

The carrying value or book value of assets is determined under GAAP/IFRS and is based on the cost of the asset. This means that the asset is recorded on the balance sheet at its historical cost less any accumulated depreciation, amortization, or impairment charges. It does not necessarily represent the true market value or replacement cost of the asset, but rather its value as measured by the accounting standards. While it may not always be the best measure of the company's value to an investor, it is a widely accepted accounting practice.

The Carrying Value or Book Value of Assets