Free ISACA CISM Actual Exam Questions - Question 9 Discussion

A/B? I get why some say C for accounting purposes, but I think the question is about the primary basis for asset value, not just book value. Replacement cost (A) or business cost when assets aren’t available (B) seem more relevant for real-world valuation. Between those two, B could matter if the asset is rare or hard to replace, making the business cost a better measure. So I’d pick B here as it reflects what you’d actually spend if the asset’s unavailable, which might be more practical than just replacement cost.

Maybe A makes the most sense here since replacement cost shows what you’d pay now to get the asset, which is relevant for real current value. Original cost minus depreciation (C) is more about historical cost and doesn’t reflect market changes. Total cost of ownership (D) is useful for decisions but isn’t typically how value gets determined in accounting. B seems off because business cost when assets aren’t available is too situational and not a standard valuation method.

C/D? While original cost minus depreciation (C) fits accounting standards, total cost of ownership (D) might better capture asset value by including maintenance and usage costs, offering a fuller picture beyond just purchase price.

I’m thinking option A could be the primary basis here because replacement cost reflects what it would actually take to get a similar asset today. Original cost minus depreciation (C) is historical and might not represent current value accurately. TCO (D) feels more like a management decision factor rather than a valuation basis. Also, business cost when assets aren’t available (B) seems less relevant unless we’re talking about scarcity pricing. Does the question imply financial reporting or practical asset management? If it’s accounting-focused, maybe C, but for valuation in general, A seems s

Option C makes the most sense since asset value usually reflects what's recorded on the books after depreciation, which is standard for financial reporting. Other options seem more about operational or replacement costs.

Probably D, but the question doesn’t specify the context—like if this is for accounting, insurance, or something else. TCO usually includes all costs over the asset’s life, which makes sense, but for financial statements, original cost minus depreciation (C) might be used. Anyone else think the purpose of valuation could change the right answer here?