REPLACEMENT VALUE Definition

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REPLACEMENT VALUE is the cost to replace an item on the present market. Replacement value is a valuation similar to an adjusted book value analysis. Replacement value is different than liquidation value in that is uses the value of the replacement value of assets, which is usually higher than book value. Liabilities are deducted from the replacement value of the assets to determine the replacement value of the business.

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ENTITY THEORY is where a legal entity is regarded as having a separate existence from the owners. The financial statements are prepared from the perspective of the entity, not its owners. See PROPRIETARY THEORY.

ORDER INTAKE is all orders which were legally concluded during the respective accounting period under review and have also come into effect.

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