Long-term asset that is retired from operations and held for disposal or sale are valued at ________.
A)lower of carrying value or net realizable value
B)lower of cost or market
C)value in use
D)replacement cost

Question

Quizplus · Accepted Answer

Long-term assets held for disposal or sale are valued at lower of carrying value or net realizable value. This means that the value of the asset is compared to the expected selling price minus any disposal costs, and if this net realizable value is lower than the carrying value (book value) of the asset, it is written down to the lower amount. This ensures that the asset is not carried at a value higher than it is expected to generate upon sale. The other options, lower of cost or market, value in use, and replacement cost, do not properly reflect the value of a long-term asset held for disposal or sale.

Long-Term Asset That Is Retired from Operations and Held for Disposal