Book Value Is Zero

Book value is equal to the cost of carrying an asset on a company s balance sheet and firms calculate it netting the asset against its accumulated depreciation.

Book value is zero. Now say the truck has been fully depreciated to a salvage value of 1 000. If it is following slm model it needs to provide certain fixed amount of depreciation at the end of every year. So the aftertax salvage value is.

If the company sells the truck for 1 500 it reports a gain of 1 500 on the sale. The cost and accumulated depreciation will continue to be reported until the company disposes of the assets. Value investors use the price to book p b ratio to compare.

As a result the combination of these assets costs minus their accumulated depreciation will likely be a net amount of zero. If it has to pay 100 to get a junkyard to take it the company reports a 100 loss. Aftertax salvage value mv 0 mv t c aftertax salvage value mv 1 t c we will use this equation to find the aftertax salvage value since we know the book value is zero.

For assets the value is based on the original cost of the asset less any depreciation amortization or impairment costs made against the asset. I understand that when running fa reports it excludes assets with a status of retired however when using smartlist fixed assets book there is no field to filter out all assets with a status of retired. If the book value is zero the equation for the aftertax salvage value becomes.

For an asset with nil net book value that is simply thrown away the journal will simplify to. So when the life of the asset gets over its book value will become zero at the end. Aftertax salvage value.

Traditionally a company s book value is its total assets clarification needed minus intangible assets and liabilities. Dr cost cr accumulated depreciation. The book value of a company is the difference in value between that company s total assets and total liabilities on its balance sheet.