ACCT302 W4 Forum
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American Public University *
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302
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Accounting
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Apr 3, 2024
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In this discussion, please reflect on the previous weeks’ topics. Choose a topic you found to be difficult or hard to understand. Research this topic and
present your findings. Include a summary of the topic, why you found the topic to be difficult, and what you learned after conducting the research. You MUST use the APUS Library to conduct your research.
Hello Class,
We made it half-way through the course! I personally struggle with the topic of the value of a company’s assets. To determine the value of a company’s assets two accounting measures are used, book value and fair value. An asset at book value is recognized on the company’s balance sheet and is calculated by taking the “cost paid for acquiring an asset minus any depreciation, amortization, or impairment costs applicable to the asset” (Corporate Finance Institute 2022). An asset valued at fair value is a reasonable estimation of the asset’s value. Determining an asset’s fair value can be complicated because it is “based on several factors such as utility, related costs, and supply and demand considerations” (Corporate Finance Institute 2022). Due to the risk of potential accounting fraud, calculating fair value is guided by the IFRS and GAAP. Generally, the costs of current assets that are for resale in the market are determined using fair value measurement. Hopefully this also helps anyone else that may be slightly confused when measuring the value of an asset. Have a great week and good luck on the midterm!
-Tracie
Book value vs fair value
. Corporate Finance Institute. (2022, March 6). Retrieved April 26, 2022, from https://corporatefinanceinstitute.com/resources/knowledge/accounting/
book-value-vs-fair-value/
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