BALANCE SHEETS
The net book value of assets is not an indication of their true worth. Value is determined by current market conditions and is based on the price that a prospective purchaser would be prepared to pay to acquire a particular asset. In many cases the Net Book Value of assets will seriously understate the true value of those assets to the company. The recently published FRS 15 deals with this issue and suggests that reported asset values should be more relevant. An accurate statement of asset value can also help to reduce the risk of an unsolicited takeover below the true value of a company and reduce the potential for asset stripping.

MERGERS & AQUISITIONS
Following a merger, acquisition or joint venture it is advisable to include the assets in the company‚s financial statements at Œfair values‚ as outlined in the Institute of Chartered Accountants FRS 7. An accurate assessment of plant value can reduce the element of goodwill and maximise the capital allowance tax benefits.