BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Fixed assets are shown in the Balance sheet at cost less depreciation. Depreciation is apportioning the cost of the asset by writing it off over the life of the asset. It is also used to record the decline in the value of asset due to passage of time, wear and tear etc.

Detailed explanation-2: -A historical cost is a measure of value used in accounting in which the value of an asset on the balance sheet is recorded at its original cost when acquired by the company. The historical cost method is used for fixed assets in the United States under generally accepted accounting principles (GAAP).

Detailed explanation-3: -When a fixed asset is acquired in exchange or in part exchange for another asset, the cost of the asset acquired should be recorded either at fair market value or at the net book value of the asset given up, adjusted for any balancing payment or receipt of cash or other consideration.

Detailed explanation-4: -Answer: Fixed assets are not shown in the books at market value because : (i) as per historical concept, we recorded fixed assets at original cost, and (ii) as per going concern concept, the assets are not going to be sold in the near future, Hence, the market value is irrelevant.