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Fixed Assets purchased at a discount

Hello. We purchased several fixed assets at a significant discount because a similar company was going out of business. In our financials, we recorded the assets at cost and they are depreciating in accordance with policy.
Does replacement value need to be factored into the valuation at all, or that would be more from a cash forecasting for capex and insurance standpoint? thanks.

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

You are correct, replacement costs should only be factored into future CAPEX. You'd need to talk to your insurance company about what is needed to insure at replacement cost.

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