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5 Statement Presentation and Analysis

Your friend Pete owns a small business, and he's not sure how he should treat fully depreciated assets on his company's balance sheet.

What advice should you offer to Pete?

Answer :

Final answer:

Fully depreciated assets on a company's balance sheet should be shown at their salvage value and listed separately under a specific category. Consult an accountant or financial advisor for compliance with accounting standards.


Explanation:

When fully depreciated assets are treated on a company's balance sheet, they are typically shown at their salvage value, which is the estimated value of the asset at the end of its useful life. This is done to reflect that the asset no longer has any economic value to the company. The depreciated assets should be listed separately on the balance sheet, under a category such as 'Fully Depreciated Assets' or 'Accumulated Depreciation'. It is important for Pete to consult with an accountant or financial advisor to ensure that the treatment of fully depreciated assets complies with accounting standards and regulations.


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