When a non-current asset is sold the gain or loss on disposal is the difference between:
A) fair market value and accumulated depreciation.
B) replacement value and selling price.
C) fair value and selling price.
D) selling price and carrying amount.

Question

Quizplus · Accepted Answer

The gain or loss on disposal of a non-current asset is calculated as the difference between the selling price and the carrying amount (or book value) of the asset at the time of sale. The carrying amount is the asset's original cost minus any accumulated depreciation or impairment losses. Therefore, option D is the correct answer. Options A and C are incorrect because they both include fair market value, which may not be relevant to the gain or loss calculation. Option B is also incorrect because replacement value is not typically used in determining gain or loss on disposal.

When a Non-Current Asset Is Sold the Gain or Loss