Which of the following best describes the nature of assets of held-for-sale operations?
A) Impairment testing based on most likely sale or disposal price.
B) Impairment testing if plants are closed or equipment is not used.
C) Lower of cost or market impairments, including an allowance for obsolescence.
D) Estimates and assumptions made in preparation of the estimate of income tax expense for the year.

Question

Quizplus · Accepted Answer

Assets held-for-sale operations are assets that are expected to be sold or disposed of within a short period, usually up to one year. These assets are measured at the lower of carrying amount and fair value less costs to sell. Impairment is tested based on the most likely sale or disposal price, which is determined through market data and other relevant information. Therefore, option A is the best choice as it correctly describes the nature of assets held-for-sale operations.

Which of the Following Best Describes the Nature of Assets