The net book value of a non-current asset is calculated as which of the following?
Question 1 Report
The net book value of a non-current asset is calculated as which of the following?
Answer Details
The correct answer is Cost minus accumulated depreciation.
Net book value (NBV) represents the carrying amount of a non-current asset in the accounting records. It is calculated as the original cost of the asset minus the total depreciation charged to date (accumulated depreciation).
Cost minus sale proceeds would give the profit or loss on disposal, not the NBV. Cost minus annual depreciation charge only deducts one year's depreciation, ignoring prior years. Cost minus residual value gives the total depreciable amount over the asset's life, not its current carrying value.
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