Carrying Amount
Category
General Concepts
Carrying amount (or book value) is the net amount at which an asset or liability is reported on the balance sheet after accounting for accumulated depreciation, amortization, or impairment. For ROU assets, the carrying amount equals the initial measurement less accumulated amortization and any impairment losses.
Why it matters
The carrying amount of ROU assets and lease liabilities must be accurately maintained throughout the lease term. Any discrepancy between the carrying amount and expected values indicates calculation errors that need investigation. The carrying amount is also the starting point for modification and impairment accounting.
How Arvexi handles this
Arvexi maintains accurate carrying amounts for all ROU assets and lease liabilities, automatically updating them for periodic amortization, interest accretion, payments, modifications, and impairments. Balance reconciliation reports verify carrying amounts against expected values.