Carrying amount or book value is the value of an asset as it appears on the balance sheet and is acquired, after deducting its depreciation value and impairment expenses. The market value of an asset, on the other hand, depends on supply and demand, where if the demand is high, its value increases and if the demand is low, its value decreases. Carrying amount is based on the gradual depreciation of the value of a certain asset, which means that its value will change and decline through time. Market value is the value given to an asset when it is being sold in the open market. Historical cost is the cost a which asset was actually purchased. Fair value of an asset is the cost at which asset can be purchase now at an arm’s length transaction. Amortized Cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance. IFT Support Team
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Have been trying to get my head around this part, but never quite fully understood. Brilliant video, so glad I finally get it! Thankyou :)
Thank you again IFT for the amazing explanation on Financial assets!
You are welcome.
IFT support team
Financial asset part is simply wow
thank you so much for such clear explanation in simplified way.
example of marketable securities is stocks and bonds and financial assets are also bonds or stock , so what is difference between both?
thanks for the video, do we have to report the interest income for held-to-maturity in the income statement?
Yes, interest income will be reported on Income Statement
IFT Support Team
Does along with mark to market change we record fair value change is reflected in Income statement ?
Thanks, this is very helpful.
Glad it was helpful!
IFT Support Team
Is there any training centre branch in Dubai of yours. Would love to join.
No. there is no branch in Dubai.
IFT Support Team
thank you for this video :)
Hi I am confused between
Carrying value
Fair value
Historical cost
Amortised cost
Book value
Amortised amount
Market value
Can u help me to understand
Carrying amount or book value is the value of an asset as it appears on the balance sheet and is acquired, after deducting its depreciation value and impairment expenses. The market value of an asset, on the other hand, depends on supply and demand, where if the demand is high, its value increases and if the demand is low, its value decreases.
Carrying amount is based on the gradual depreciation of the value of a certain asset, which means that its value will change and decline through time. Market value is the value given to an asset when it is being sold in the open market.
Historical cost is the cost a which asset was actually purchased. Fair value of an asset is the cost at which asset can be purchase now at an arm’s length transaction.
Amortized Cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance.
IFT Support Team
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