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Ask the Tutor ACCA FM

Share valuation NBV

SSourav4y ago
Sir, In BPP text I read Under Net book value we consider the Non current assets net of depreciation If it's true then isn't it net carrying value. Also you mentioned one reservation in your lecture that the value of assets might be outdated (unless bought recently) But if we are considering depreciation isn't value up-to-date.
John MoffatJohn MoffatTutor4y ago#1
Net book value and net carrying value both mean the same - i.e. the values in the SOFP. The values in the SOFP (i.e. after depreciation) certainly do not ever represent the 'true' value of the asset. The purpose of depreciating is simply to spread the cost over the useful life. It is never intended to show the actual value of the asset.
SSourav4y ago#2
Okay Sir, All my doubts got crystal cleared. :-)
John MoffatJohn MoffatTutor4y ago#3
You are welcome :-)
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