My response would be that depreciation matches the expense of the asset to the life of the asset. On the books, accumulated depreciation represents the amount claimed so far. Claiming depreciation gets you a slight tax break (say 15% to 35%). Prices go up in the mean time.

Corporations generally invest in debt or stock securities for one of these three reasons: Corporations may have excess cash, to generate earnings from investment income, and for strategic reasons. A large technology, drug or medical device company may invest in a promising startup that is developing new products which may be complementary to the buyer's product line. If the new technology holds promise, the buyer may buy the startup outright and make it a secondary if not, the buyer may sell or write off the investment. The rationale is simple, it is often cheaper to invest in a startup than to develop a new technology in-house, besides, stock ownership gives the buyer the right to examine the books and become privy to inside information. Large technology companies such as Intel or Cisco have large portfolios of technology startups through their venture capital arms.

Companies may elect to use the fair value measurement option at the time the financial instrument is originally recognized or when some an event triggers a new basis of accounting. Market to market accounting can change values on the balance sheet frequently. In contrast the historical cost is based on the past transactions. Valuation guidelines are mainly useful to compare the market value of investments with book value of investments.

An investment can be accounted for by the cost, equity or consolidated methods of accounting. The ownership level determines the accounting method. The cost method is used if ownership is less than 20%, the equity method if ownership is between 20% and 50% and the consolidated method if