Final answer:
Plant assets are reported on a balance sheet at their book value, which is the acquisition cost minus accumulated depreciation. This does not necessarily reflect the fair market value.
Step-by-step explanation:
Plant assets are reported on a balance sheet at their book value, which is the acquisition cost of the asset minus the accumulated depreciation. This means that the asset is recorded at its original cost, rather than its current fair market value. For example, if a company purchased a machine for $10,000 and it has accumulated depreciation of $2,000, the book value of the machine would be $8,000.
This accounting treatment allows companies to track the historical cost of their assets and reflects the original investment made. However, it may not necessarily reflect the current market value of the asset. Fair value accounting, on the other hand, would require assets to be recorded at their current market value.
Therefore, the statement is true. Plant assets are reported on a balance sheet at their book value and not necessarily at fair market value.