Carrying value là gì

     
The value of an asset as reflected in a company’s book or balance sheet, minus its depreciation value

What is the Carrying Amount?

The carrying amount is the original cost of an asset as reflected in a company’s books or balance sheetBalance SheetThe balance sheet is one of the three fundamental financial statements. These statements are key khổng lồ both financial modeling and accounting, minus the accumulated depreciation of the asset. It is also called book value and is not necessarily the same as an asset’s fair valueFair ValueFair value refers to lớn the actual value of an asset - a product, stock, or security - that is agreed upon by both the seller & the buyer. Fair value is applicable to lớn a hàng hóa that is sold or traded in the market where it belongs or under normal conditions - & not khổng lồ one that is being liquidated. Or market value.Bạn sẽ xem: Carrying amount là gì


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Carrying Amount vs. Market Value

Carrying amount và market value differ in many ways, as listed below:

Example of Carrying Amount

Let’s say a company owns a tractor worth $80,000 khổng lồ be used for developing its newest land property. The said tractor’s annual depreciation is $3,000 and is expected khổng lồ still be of use for trăng tròn years, at which time the salvage value is expected to lớn be $20,000. The annual depreciation is therefore $3,000 ($80,000-20,000)/20 years. At the over of the trăng tròn years, the tractors carrying amount is $20,000.Bạn vẫn xem: Understanding carrying value là gì, carrying value với carrying amount


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Example of Fair Value

Given the same tractor, its fair value will depend on the supply & demand in the market. If, at the time it was sold in the market, the demand for tractors is high, it can be priced higher than its carrying value. The opposite can also be true if the demand goes down. The price of the tractor can go up or down, depending on how much buyers are willing to lớn give for it.

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Carrying Value vs. Book Value

How to lớn Calculate for Carrying Amount

It is a very simple task khổng lồ calculate for carrying amount, as shown in the example above. But to lớn make it clearer, let’s explain it below:

Take the original cost of purchasing the asset less salvage value.Divide that number by the number of years the asset is expected to be of use khổng lồ generate the annual depreciation amount và record annually.Calculate the accumulated depreciation (number of years past * annual depreciation)Subtract the accumulated depreciation from the original purchase price to get the carrying amount.

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Depreciation in the Carrying Amount

Depreciation is the lowering of the value of a tangible asset because of wear và tear. Tangible assets include buildings, equipment, furniture, and vehicles. One of the easiest and most commonly accepted methods of computing for depreciation is the straight-line depreciation methodStraight Line DepreciationStraight line depreciation is the most commonly used & easiest method for allocating depreciation of an asset. With the straight line. Using the straight-line method, the same depreciation value is copied for every year, such as what was done in the above example wherein if the depreciation value for the first year is $3,000, it would be the same value for the succeeding years.

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The other method is the double-declining balance depreciation methodDouble Declining Balance DepreciationThe double declining balance depreciation method is a khung of accelerated depreciation that doubles the regular depreciation approach. It is, otherwise known as the 200% declining balance method. With the DDB method, the depreciation is faster than that of straight-line but will not make the depreciation value bigger. It just means that depreciation is bigger in the early years but smaller in the later years.

Related Readings


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certification program, designed to lớn help anyone become a world-class financial analyst. To lớn keep advancing your career, the additional CFI resources below will be useful: