When an asset is sold the gain or loss on disposal is the difference between the:

Question

Quizplus · Accepted Answer

The gain or loss on disposal is calculated as the difference between the proceeds of sale and the carrying amount of the asset. This is because the carrying amount represents the net book value of the asset on the balance sheet, which takes into account any accumulated depreciation or impairment losses. The original cost of the asset and the fair value of the asset are not relevant in calculating the gain or loss on disposal.

When an Asset Is Sold the Gain or Loss on Disposal