§ 31503 Asset Valuation Adjustment

• •The boss in charge can make a company lower the value of something it owns if it's not worth as much anymore.
• •This is to make sure the company's books show the real value of its stuff, not just what it was worth before.
• •The company has to follow this rule, even if it means showing less money on paper.

A bank owns a bunch of old computers that it bought for $10,000 a few years ago. Now, those same computers are only worth $2,000 because they're outdated.

The boss in charge can tell the bank, 'You have to say those computers are only worth $2,000 now, not $10,000.' This way, the bank's records show the real value of what it owns.