23 October 2008
YOU ARE BUYING MACHINE. YOU SPEND RS.10000. THIS IS COST. MACHINE WILL HELP YOU FOR PRODUCTION. THIS IS CONCEPT OF ECONOMIC ACTIVITY. IT GIVES YOU PROFIT. HERE YOU WILL PREPARE P&L WHERE YOU WILL CHARGE DEPRECIATION. THEN ARRIVE AT NET PROFIT. THIS WILL BE CONTINUED ONLY IF YOU HAVE AVOIDED RED. I AM SORRY FOR SHORT EXPLANATION. AS THIS CAN GO ON FOR 10 PAGES.
30 October 2008
To value an asset on Going concern concept is to value the asset as it is being used in normal business operation. That is not looking at it in isolation of the functuion it is used for. This will fetch the true value for the asset on the basis of its real useability.
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