This preview shows page 1. Sign up to view the full content.
Unformatted text preview: riteoff would be $66.67 (12,000/180). Depletion is used to record the consumption of natural resources. Depletion is depreciation of wasting assets such as mines, oil wells, timber trees etc.
15 Types of Valuation People often use the term net book value interchangeably with net asset value (NAV), which refers to a company's total assets minus its total liabilities. Here's the formula for net book value:
Net Book Value = Cost of the Asset Accumulated Depreciation
Assume A Company bought a CAR for $10,000 three years ago. The CAR depreciates by $1,000 a year. Thus the net book value of the CAR is:
$10,000 $1,000 (year 1 depreciation) $1,000 (year 2 depreciation) $1,000 (year 3 depreciation) = $7,000. 16
16 Market Types of Valuation ValueThe current price at which investors buy or sell a share of common stock or a bond at a specific time. In the context of securities, market value is often different from book value because the market value reflects future expectations. Mos...
View Full Document