When a purchase business is revalued, the effect is that
Question
When a purchase business is revalued, the effect is that
Options
A)
a decrease in the value of asset has no effect on value of goodwill
B)
an increase in the value of asset is treated as an increase in the value of goodwill
C)
a decrease in the value of asset is treated as an decrease in the value of goodwil
D)
an increase in the value of asset is treated as an decrease in the value of goodwill
The correct answer is D.
Explanation:
In finance, a revaluation of fixed assets is a technique that may be required to accurately describe the true value of the capital goods a business owns. This should be distinguished from planned depreciation, where the recorded decline in value of an asset is tied to its age.
When a purchase business is revalued, the effect is that an increase in the value of asset is treated as an decrease in the value of goodwill.
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In finance, a revaluation of fixed assets is a technique that may be required to accurately describe the true value of the capital goods a business owns. This should be distinguished from planned depreciation, where the recorded decline in value of an asset is tied to its age.
When a purchase business is revalued, the effect is that an increase in the value of asset is treated as an decrease in the value of goodwill.