Which of the following statement regarding long-term operating assets classified as held for sale or disposal is true?
A)Long-term operating assets classified as held for disposal are valued at historical cost.
B)Companies may only depreciate long-term operating assets classified as held for sale or disposal on a straight-line basis.
C)If the company writes down the asset in one period,the company can report an increase in value in the subsequent period if the fair value has materially increased.
D)Long-term operating assets classified as held for disposal are valued at undepreciated cost.

Question

Quizplus · Accepted Answer

Long-term operating assets classified as held for sale or disposal are valued at fair value less cost to sell, not historical cost or undepreciated cost. Companies may use various methods to depreciate these assets, including straight-line or accelerated methods. If the company writes down the asset in one period, it cannot report an increase in value in the subsequent period unless there has been a change in circumstances indicating that the fair value has materially increased.

Which of the Following Statement Regarding Long-Term Operating Assets Classified