EX 3-20 Book value of fixed assets

In a recent balance sheet, Microsoft Corporation reported Property, Plant, and Equipment
of $15,082 million and Accumulated Depreciation of $7,547 million.
a. What was the book value of the fixed assets?
b. Would the book value of Microsoft Corporation’s fixed assets normally approximate
their fair market values?

Answer:
a. $7,535 million ($15,082 – $7,547)

b. No. Depreciation is an allocation method, not a valuation method. That is, depreciation allocates the cost of a fixed asset over its useful life. Depreciation does not attempt to measure market values, which may vary significantly from year to year.