Costs carried forward for an abandoned area of interest should be expensed in the period the decision to abandon was made.

Question

Quizplus · Accepted Answer

Costs associated with an abandoned area of interest should be expensed in the period when the decision to abandon was made. This is in accordance with the matching principle of accounting, which requires expenses to be recognized in the same period as the related revenues or benefits. By expensing these costs, the financial statements reflect the accurate financial position of the company and avoid overstating assets or understating liabilities.

Costs Carried Forward for an Abandoned Area of Interest Should