Basic Financial Statements The Balance Sheet The Balance Sheet –
Valuing Balance Sheet Items Items on the assets side of the
balance sheet are generally valued at cost. There are two
exceptions—marketable securities and inventories. The rule that
applies to marketable securities and inventories is lower of
cost or market. That means that current market value or original
cost, whichever is lower, is the appropriate value for
marketable securities and inventories. For instance, if a share
of stock was originally purchased for $80 three years ago and
its value has fallen to $60, the value that would appear on the
balance sheet is $60. One note that should be made is in
reference to accumulated depreciation. The accumulated
depreciation account is what is called a contra-assetContra-
asset:An asset item which would in essence carry a minus sign.
account. That means that even though accumulated depreciation is
reflected on the assets portion of the balance sheet, it in
essence carries a minus sign. Therefore, if Gr