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Bingel [31]
1 year ago
4

what is the difference between book value accounting and market value accounting? how do interest rate changes affect the value

of bank assets and liabilities under the two methods
Business
1 answer:
hichkok12 [17]1 year ago
7 0

Using book value accounting, assets and liabilities are recorded at their original issue value. Market value accounting is used to report assets and liabilities at their current market pricing.

If assets and obligations are held until maturity, interest rate changes have no effect on the FI's value. If deposits or loans need to be refinanced, market value accounting gives a more accurate picture of the FI's current financial situation. "Marking to market" refers to the procedure used to document changes in the economic worth of assets and liabilities.

The market value of a corporation is its worth in terms of the financial markets. By dividing the current stock price by the total number of outstanding shares that are actively traded in the market, one can determine a company's market value. Market capitalization is another name for market value.

The amount that shareholders would get if a firm was liquidated and all of its debts were settled is known as the book value of a stock. The difference between a company's total assets and its liabilities is hence its book value.

Learn more about Accounting at

brainly.com/question/13310721?referrer=searchResults

#SPJ4

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