Assuming an asset has been fully depreciated according to its MACRS class life, which one of the following statements is correct concerning the current value of the asset?
A) Its market value is zero.
B) Its book value is zero.
C) Its book value is the current market value.
D)It has neither a book value nor a market value.

Question

Quizplus · Accepted Answer

The book value of an asset that has been fully depreciated according to its Modified Accelerated Cost Recovery System (MACRS) class life is zero. This is because depreciation under MACRS is a method of allocating the cost of a tangible asset over its useful life, and once fully depreciated, its cost has been fully allocated, leaving a book value of zero. This does not necessarily reflect the current market value of the asset, which could be higher or lower than the book value.

Assuming an Asset Has Been Fully Depreciated According to Its