Self-constructed assets may never be valued in excess of fair market value, regardless of cost.

Question

Quizplus · Accepted Answer

Self-constructed assets must be recorded at their fair market value, which represents the price that would be received to sell the asset in an orderly transaction between market participants. While cost may be a relevant factor in determining fair market value, it cannot be used to inflate the value of the asset beyond what would be considered reasonable in the open market. Therefore, self-constructed assets may never be valued in excess of fair market value, regardless of the actual cost incurred in building or acquiring them.

Self-Constructed Assets May Never Be Valued in Excess of Fair