The carrying amount of property, plant, and equipment
A)is always equal to its fair value.
B)is always greater than its fair value.
C)is always less than its fair value.
D)may be different than its fair value.

Question

Quizplus · Accepted Answer

The carrying amount of property, plant, and equipment (PP&E) is based on historical cost less any accumulated depreciation and impairment losses. This amount may be different than its fair value due to changes in market conditions, usage, and other factors affecting the value of the asset over time. Fair value can fluctuate above or below the carrying amount.

The Carrying Amount of Property, Plant, and Equipment