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 GAPP and is based on the current market value of the assets.

Question

Quizplus · Accepted Answer

The carrying value or book value of assets is determined under GAAP and is based on the cost of the assets. This means that it reflects the historical cost of acquisition, and not the current value or replacement cost. While it may not always be the best measure of a company's value to an investor, it is a required accounting practice for publicly traded companies to report their assets at their carrying value.

The Carrying Value or Book Value of Assets