A loss on disposal of a plant asset will occur if the cash proceeds received from the asset sale are less than the asset's book value.

Question

Quizplus · Accepted Answer

A loss on disposal of a plant asset occurs when the cash proceeds received from the asset sale are less than the asset's book value. In other words, the asset is sold for less than its recorded value on the company's books, resulting in a loss for the company.

A Loss on Disposal of a Plant Asset Will Occur