Question:

When calculating net fixed assets why can’t a company just take the difference in what they started the year?

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When calculating net fixed assets why can’t a company just take the difference in what they started the year?

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  1. because the different is the depreciation for that year....no the book value(carrying amount)  of the asset


  2. The obvious reason that the difference  is the depreciation for the year which hardly has any reality.  Depreciation is a calculation taken into account for gross, and not the actual. It is actually can not be arrived correctly at any point of time after starting in reality.

    Fixed assets' value therefore is calculative for a going concern.

    However, only at the starting, it got a real value.

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