When firms dispose of a long-lived asset before the end of its useful life,the difference between the net book value of the asset and the sale proceeds is a gain or loss from a discontinued item.

Question

Quizplus · Accepted Answer

The difference between the net book value of the asset and the sale proceeds is recognized as a gain or loss on disposal of the asset, not as a gain or loss from a discontinued item. Discontinued operations refer to components of an entity that have been disposed of or classified as held for sale and represent a separate major line of business or geographical area of operations.

When Firms Dispose of a Long-Lived Asset Before the End