What is valuation of assets?

Definition: Valuation of Assets or asset valuation is a process of determining the present market value of the assets of the business as shown in the balance sheet of the company based on universally accepted accounting principles.

Why is a fair valuation of assets a problem?

Still, they have an impact on such assets afterwards also, which may act as a problem for fair valuation of assets. Sometimes there is a possibility that an auditor may miss some facts or information due to any reason that can be a reason behind the improper valuation of assets.

Why is valuation important in audit process?

Valuation of assets plays a significant role in the process of audit as it helps in determining the fair position of the assets in the balance sheet. Along with this, there are a number of motives behind the valuation of assets; some of them are as follows:

What is the simplest method of asset valuation?

The purchasing cost of an asset is treated as a base for the asset valuation in this method, the valuer need not do any calculation, the purchase value of the asset is considered as the current value of the asset, and this method of valuation is the simplest method amongst all method.