Let's define each valuation basis: (1) Historical cost = original purchase price paid (Rs. 5,00,000), (2) Present value = discounted future cash flows expected from using the asset, (3) Realisable value = selling price less costs to sell (market value on a specific date), (4) Current cost = replacement cost (cost to acquire same asset now). The question states: Market value as on 31st March 2007 = Rs. 6,00,000. Market value on a specific date IS the realisable value - what you could sell it for on that date. Since the company is valuing at Rs. 6,00,000 (the market value), they are following the Realisable value principle (C). This is NOT going concern valuation (which would use historical cost less depreciation).