On disposal of an asset a gain or loss is the difference between the proceeds from sale and:
A) the cost of an asset.
B) residual value of the asset.
C) carrying amount of the asset.
D) revalued amount of the asset.

Question

Quizplus · Accepted Answer

When an asset is disposed of, the gain or loss on disposal is calculated as the difference between the proceeds from sale and the carrying amount of the asset. The carrying amount is the original cost of the asset less any accumulated depreciation or impairment losses. The residual value and revalued amount are relevant when calculating depreciation or impairments, but not on disposal. Therefore, the correct choice is C.

On Disposal of an Asset a Gain or Loss Is