Amortized Cost Vs. Market Value

by Le Bach Pham; Updated September 26, 2017
Amortization and market value are two options available for reporting assets.

Amortization and market value are the two most common methods for reporting asset valuations. Each accounting method has its advantages and disadvantages.

Amortization

Amortization is an accounting method that deducts capital expenses over a certain time period, which is usually the asset’s lifetime.

Market Value

Market value is the current price at which investors can buy or sell a share of common stock or a bond. Market value is also referred to as “market price,” according to Investopedia.

Accounting Standards

The Federal Accounting Standards Advisory Board sets the standard for reporting asset valuations. These standards are known as the Generally Accepted Accounting Principles, according to Investopedia. However, when investors analyze the value of securities, market value takes into account future growth potential, which differs from book value.

About the Author

Le Bach Pham has been writing professionally since 2002 and currently writes articles for various websites. He served as an editor for "The Mesa Press" and graduated from the University of California, San Diego with a Bachelor of Arts in English literature.

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