Recaptured depreciation and terminal loss occur when:
A)All assets are depreciated over five years
B)Depreciable percentages decline throughout the asset's class life
C)Straight-line depreciation percentages are doubled
D)A business terminates an asset pool

Question

Quizplus · Accepted Answer

Recaptured depreciation and terminal loss occur when a business terminates an asset pool. When a business disposes of an asset before the end of its useful life, it may need to recapture some of the depreciation claimed in previous years, resulting in recaptured depreciation. On the other hand, if the disposition of an asset results in a loss, it is called a terminal loss. These events can occur when a business terminates an asset pool.

Recaptured Depreciation and Terminal Loss Occur When