Carrying amount là gì

The value of an asset as reflected in a company’s book or balance sheet, minus its depreciation value

What is the Carrying Amount?

The carrying amount is the original cost of an asset as reflected in a company’s books or balance sheetBalance SheetThe balance sheet is one of the three fundamental financial statements. These statements are key to lớn both financial modeling and accounting, minus the accumulated depreciation of the asset. It is also called book value và is not necessarily the same as an asset’s fair valueFair ValueFair value refers khổng lồ the actual value of an asphối - a hàng hóa, stock, or security - that is agreed upon by both the seller & the buyer. Fair value is applicable khổng lồ a product that is sold or traded in the market where it belongs or under normal conditions - & not khổng lồ one that is being liquidated. or market value.Quý Khách đã xem: Carrying amount là gì


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Carrying Amount vs. Market Value

Carrying amount và market value differ in many ways, as listed below:

Example of Carrying Amount

Let’s say a company owns a tractor worth $80,000 khổng lồ be used for developing its newest lvà property. The said tractor’s annual depreciation is $3,000 và is expected to still be of use for trăng tròn years, at which time the salvage value is expected to lớn be $20,000. The annual depreciation is therefore $3,000 ($80,000-20,000)/đôi mươi years. At the kết thúc of the 20 years, the tractors carrying amount is $20,000.

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Example of Fair Value

Given the same tractor, its fair value will depend on the supply & demand in the market. If, at the time it was sold in the market, the demand for tractors is high, it can be priced higher than its carrying value. The opposite can also be true if the demand goes down. The price of the tractor can go up or down, depending on how much buyers are willing to give for it.

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Carrying Value vs. Book Value

How to Calculate for Carrying Amount

It is a very simple task to lớn calculate for carrying amount, as shown in the example above. But to lớn make it clearer, let’s explain it below:

Take the original cost of purchasing the asset less salvage value.Divide that number by the number of years the asmix is expected to lớn be of use to lớn generate the annual depreciation amount và record annually.Calculate the accumulated depreciation (number of years past * annual depreciation)Subtract the accumulated depreciation from the original purchase price to lớn get the carrying amount.

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Depreciation in the Carrying Amount

The other method is the double-declining balance depreciation methodDouble Declining Balance DepreciationThe double declining balance depreciation method is a form of accelerated depreciation that doubles the regular depreciation approach. It is, otherwise known as the 200% declining balance method. With the DDB method, the depreciation is faster than that of straight-line but will not make the depreciation value bigger. It just means that depreciation is bigger in the early years but smaller in the later years.

Related Readings

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certification program, designed lớn help anyone become a world-class financial analyst. To keep advancing your career, the additional CFI resources below will be useful: