Asked by Hannah Williams on Jun 06, 2024
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When firms dispose of a long-lived asset before the end of its useful life,the difference between the net book value of the asset and the sale proceeds is a gain or loss from a discontinued item.
Long-Lived Asset
Assets used in the operations of a business that are expected to provide economic benefits for a period longer than one year.
Net Book Value
The value of an asset after subtracting accumulated depreciation from its original cost, synonymous with carrying value but rephrased for clear understanding.
Discontinued Item
Pertains to the gains or losses from operations of a component of a business that has been disposed of or is held for sale.
- Understand the fundamental concepts for identifying gains and losses resulting from transactions involving the exchange or sale of assets.
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Learning Objectives
- Understand the fundamental concepts for identifying gains and losses resulting from transactions involving the exchange or sale of assets.
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