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In Asset Valuation Method, we subtract Net Liabilities from Net Assets.
But in the Question Staple Group’s a) party, they’ve just taken the asset valuation and havent subtracted the NCL from it. Why is it so?It because they are the Groups long-term borrowing and as a result will remain after selling off one division.
Okay got it.
We take the book values of the assets and liabilities right?
Then in BENTO CO (JUN 15), why does it take the market value of the NCA in part (c)?We should always use market values if the information is available – not the book values.
In Staples it is not made clear whether the 66.6 given as being the net assets is the book value or the market value, but there is no other information available and so there is no choice but to use 66.6.
Incidentally, what you wrote in your first post was wrong. Net assets means assets less liabilities.
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