Valuation Of Fixed Assets Homework Help

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Fixed Assets are those assets owned by businesses such as land and buildings that are not meant to be sold during the period while the businesses exist. There are two methods of accounting for fixed assets namely Cost Model and Revaluation Model. Under the cost model the historical price or cost of the asset is carried forward minus the accumulated depreciation and impairment losses as well. In this case no form of appreciation of market value of the asset is taken into account. Sometimes changes in fair market value of these assets occur and then there is a need for revaluation. Revaluation tolerates appreciation in market value and an upward adjustment is done to make provision for this increase of value in the financial statements.

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