If a plant asset is retired before it is fully depreciated, and the residual value received is less than the asset's book value,

Question

Quizplus · Accepted Answer

When a plant asset is retired before it is fully depreciated, and the residual value received is less than the asset's book value, a loss on disposal occurs. This is because the asset's book value is higher than the amount received for it, resulting in a loss for the company.

If a Plant Asset Is Retired Before It Is Fully