The carrying value or book value of assets:
A) is determined under GAAP and is based on the cost of the asset.
B) represents the true market value according to GAAP.
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 these.

Question

Quizplus · Accepted Answer

The carrying value or book value of assets is determined under GAAP and is based on the cost of the asset, less any accumulated depreciation or impairment. It reflects the historical cost of an asset and may not represent its current market value or replacement cost. However, it is the best measure of the asset's value on the company's balance sheet.

The Carrying Value or Book Value of Assets