The Relevance Principle Requires That Property,plant and Equipment Be Reported

question 21

True/False

The relevance principle requires that property,plant and equipment be reported at book value rather than at market value.

---

Definitions:

Reward to Risk Ratio

A metric used to compare the expected returns of an investment to the amount of risk undertaken to capture these returns.

Total Risk

The overall risk associated with an investment, including both systematic and unsystematic risks.

Market Risk

The potential for a loss faced by an investor, which is attributed to elements that influence the total performance of the financial markets.

Firm-specific Risk

The portion of a company's risk that is attributable to its own operations and environment, as opposed to market-wide risk.