The Cost and Fair Value of an Asset Are the Same

question 8

True/False

The cost and fair value of an asset are the same at the time of acquisition and in all subsequent periods.

---

Definitions:

Double-Declining-Balance

A method of accelerated depreciation in which an asset’s book value is decreased at double the rate of its straight-line depreciation.

Sum-Of-The-Years'-Digits Depreciation

A depreciation method that results in a more accelerated write-off of an asset than straight-line depreciation, based on a sum of the years’ digits formula.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, decay, or decline in value over time.

Salvage Value

The estimated resale value of an asset at the end of its useful life, used in calculating depreciation expenses.