A plant asset is fully depreciated when the book value is ________.

Question

Quizplus · Accepted Answer

When the book value of a plant asset becomes equal to its residual value, it means that all of its cost has been allocated as depreciation expense over its useful life, and its net book value is reduced to its expected salvage or residual value. At this point, the asset is considered to be fully depreciated and no additional depreciation expense should be recognized. It is possible that the book value of the plant asset is still higher than its market value or residual value, but that does not affect its depreciation status.

A Plant Asset Is Fully Depreciated When the Book Value