Difference between cost of property and accumulated depreciation cost is known as

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JKSSB JE (Civil) Official Paper (Held On: 19 Nov, 2023)

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Answer 1

Explanation:

Book Value

It is the net value of an asset, calculated as the original cost of the property minus accumulated depreciation.
Represents the value of the asset on the company’s financial records at a given time.
Important for determining tax liability, resale value, and profitability of assets.
Book Value = Original Cost – Accumulated Depreciation

Additional Information

Capital Value

Capital Value refers to the present worth of all future net income expected from a property or investment over its useful life.
It is commonly used in real estate and investment appraisal to assess profitability and return on investment.
It is calculated by discounting future income streams to their present value using an appropriate discount rate.

Salvage Value

Salvage Value is the estimated residual or scrap value of an asset at the end of its useful life.
It is the expected amount the owner can recover after the asset can no longer be used for its original purpose.
Salvage value is used in calculating depreciation during the asset’s life.

Market Value

Market Value is the current price that an asset would fetch if sold in an open and competitive market.
It reflects present economic conditions, supply and demand, and the asset’s perceived usefulness or desirability.
Market value may be higher or lower than book value, depending on various factors such as technology changes, condition of the asset, or market demand.