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Does Book Value of Assets give a precise statement of market value of the firm, State Yes / No ?

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تم إضافة السؤال من قبل مستخدم محذوف‎
تاريخ النشر: 2014/09/17
VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
من قبل VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

MY Answer is NO

Book value of an Asset need not be precise with the market value. Depreciation are provided just to make effects of the cost of use of the asset so as to reflect in the financial period for which profits and losses are calculated and to have a true and  fair  affairs of the business.

In case of certain assets more or less it may reflect the same value.

In case of certain assets like building, land etc.  the provisions, if any made may be meaningless.

In certain cases the book value may be far above the prevailing market price of the assets.

One advantage of provisioning for the assets to arrive the current book value is for Tax saving purposes 

For Example: A Motor Cycle (Company:  Bullet) Purchased20 years back may now have a NIL book value whereas, it may worth more than inflation adjusted price at the Current Price.

Thank for Invite: Mr. Muhammed Ahmed Siddiqui............ best wishes and best of luck

 

Prince Ninan
من قبل Prince Ninan , Audit Executive , Lewis & Pecker

I second with Venkitraman Krishna Moorthy

 

Khan Sohal khan
من قبل Khan Sohal khan , Associate , State Street Syntel Services Pvt Ltd.

  • Thanks Sir for inviting and I agreed with Mr. VENKITARAMAN KRISHNA MOORTHY VIRNDAVAN

Kamran Anjum
من قبل Kamran Anjum , Head of Internal Audit , Rafhan Maize Products Company limited, Faisalabad, Pakistan, Ingredion Incorporated Gmbh

The answer is NO.

 

Mr. VENKITARAMAN KRISHNA MOORTHY VIRNDAVAN has given a detailed answer and I agree with him.

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