As a certified public accountant, I appreciate the value of net worth, which is the excess of the "fair market value" of one's assets minus all liabilities. With this in mind, the vehicle values are not realistic because James' would not be able to get $23,000 from selling them or trading them in. As a result, James' net worth is overstated by approximately $10,600 (excess of the inflated values over those according to Kelley's Blue Book). This adjustment would bring her revised net worth to approximately $81,000 (from approximately $91,600).
Respectfully, I would suggest that you use Kelley's Blue Book or some other authoritative source for gathering information on vehicle fair market value, especially since vehicles are highly depreciable assets.
Editor's Note: Both Kelley's Blue Book and www.edmunds.com are widely used sources of car valuation information. While we usually use one or both of these resources, in this case, we failed to do a reality check against the valuations provided by James. Obviously, we'll be more careful going forward.
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|Article Type:||Letter to the Editor|
|Date:||Dec 1, 2003|
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