ECON 25000 Lecture Notes - Lecture 4: Accounts Receivable, Historical Cost, Financial Statement

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Document Summary

Balance sheet: presenting and analyzing resources and financing. Asset definition: an asset is a probable future economic benefit that a firm controls because of a past event or transaction. Acquisition cost or historical cost: acquisition cost: the amount of cash paid to acquire an asset. Sets a lower bound on the asset"s expected future benefits. Current replacement cost: current replacement cost: the amount a firm would have to pay to obtain another asset with identical service potential, entry value: reflects economic conditions at the measurement date. Net realizable value: net realizable value: the net cash that the firm would receive if it sold the asset today in an arm"s length transaction. Exit value: it reflects a price that the firm would receive when. Present value of future net cash flows: the sum of the present values of the individual future cash inflows and outflows associated with an asset.

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