Difference Between Proportionate and Asset Adjustment Methods

question 32

Essay

Difference between proportionate and asset adjustment methods
Explain the difference between the proportionate and asset adjustment methods of accounting when revaluing an asset.

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Definitions:

GDP

A metric for evaluating the economic success of a nation, Gross Domestic Product calculates the overall value of goods and services generated over a designated period.

GNP

Gross National Product; the total value of goods produced and services provided by a country during one year, including net income from abroad.

Net Factor Payments

The difference between the payments made to factors of production from abroad and the payments made to foreign factors of production domestically.

GDP

Gross Domestic Product, the total value of all goods and services produced over a specific time period within a country's borders.