Current market price

The current market price

Buy and sells no monopoly and mandatory, it has the corresponding time limit concept. Basic factors that determine the current market price include: basic price, the cost of production of assets; supply and demand relationships and quality factors.

Supporters of the current market price believe that the history cost is based on the past trading prices, and the current value of the assets cannot be reflected, and the correlation with the decision-making of information users is very poor, and the future transaction price is also It is difficult to determine and have strong uncertainty. In order to reflect the real value of the asset, it is easy to make the right decisions, and the current market price must be selected to reflect the realistic change value of the assets.

Features of the current market price

1, can provide asset potential value value when the company decides whether to hold an asset or even continuous operation (in In this case, it is an opportunity cost).

2, can be used to provide information on assessing corporate financial strain capabilities and performance value.

3, can be used to perform a more objective assessment of capital expenditure items (such as fixed assets) to eliminate subjective arbitrariness on cost amplifier.

Disadvantages of the current market price

is theoretically measured, it is contrary to sustainable operation hypothesis; it is not suitable for the assets intended to use (not related to the value of the performance) Some assets or liabilities (such as intangible assets, dedicated equipment or plant, etc.) are measured; it does not consider changes in general purchases, and cannot eliminate inflation.

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