Question

What amount is reported on the balance sheet for a Long-Term Asset (LTA) such as Property, Plant, and Equipment (PPE)? The original cost, or the net book value?

a. The original cost
b. The net book value
c. The market value
d. The fair value

Answer 1

On a balance sheet, Long-Term Assets such as Property, Plant, and Equipment are reported at their net book value, which is the original cost minus accumulated depreciation and impairment losses.

Step-by-step explanation:

The amount that is reported on the balance sheet for a Long-Term Asset (LTA) such as Property, Plant, and Equipment (PPE) is the net book value. This is calculated as the original cost of the asset minus any accumulated depreciation and impairment losses. The net book value represents the value of the asset that is yet to be depreciated over its useful life. It reflects how much of the asset's cost the company has already used up in operations.