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MY Answer is NO
Book value of an Asset need not be precise with the market value. Depreciation are provided just to make effects of the cost of use of the asset so as to reflect in the financial period for which profits and losses are calculated and to have a true and fair affairs of the business.
In case of certain assets more or less it may reflect the same value.
In case of certain assets like building, land etc. the provisions, if any made may be meaningless.
In certain cases the book value may be far above the prevailing market price of the assets.
One advantage of provisioning for the assets to arrive the current book value is for Tax saving purposes
For Example: A Motor Cycle (Company: Bullet) Purchased20 years back may now have a NIL book value whereas, it may worth more than inflation adjusted price at the Current Price.
Thank for Invite: Mr. Muhammed Ahmed Siddiqui............ best wishes and best of luck
I second with Venkitraman Krishna Moorthy
The answer is NO.
Mr. VENKITARAMAN KRISHNA MOORTHY VIRNDAVAN has given a detailed answer and I agree with him.
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