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- Title
TURTO ĮKAINOJIMO SAVIKAINA IR TIKRAJA VERTE KONCEPCIJŲ TEORINĖ BEI PRAKTINĖ ANALIZĖ.
- Authors
Paliulienė, Lina
- Abstract
The article analyzes the asset valuation methods of historical cost and fair value, which both are applied in accounting theory and practice. Advantages and shortcomings of both methods are revealed herein. The opinions of different authors on which method of asset valuation should be chosen by the enterprises are analyzed. Main aim of asset valuation at historical cost is to evaluate the asset by including any main expenses related to purchase and manufacturing of such asset. Fair value may be defined as an amount which the buyer is willing to pay for the product or service. Analysis of literature revealed that the authors prefer the method of fair value for valuation of asset, because real value ensures more reliable and real valuation of asset. Supporters of the method of historical cost argue that the asset assessment by real value based valuation methods is not reliable because a real price of asset may be only at the moment of sale - purchase of particular asset. In order to analyze influence of asset valuation method on an enterprise's financial condition and result of activity, the simulation example was created by using financial data of agricultural company N. The obtained results revealed that asset valuation based on fair value conception has significant influence on the financial condition and activity result of the agricultural company N.
- Subjects
FAIR value; VALUE (Economics); MERTON Model; ASSET management; FINANCIAL management
- Publication
Science & Studies of Accounting & Finance: Problems & Perspectives / Apskaitos ir Finansu Mokslas ir Studijos: Problemos ir Perspectyvos, 2012, Vol 1, Issue 8, p180
- ISSN
2029-1175
- Publication type
Article