Question

Which of the following represents an event that indicates an asset’s book value may not be recoverable? Multiple Choice A significant adverse change in how the asset is being used or in its physical condition. A significant adverse change in legal factors or in the business climate. A realization that the asset will be disposed of significantly before the end of its estimated useful life. All of these answer choices are correct

Answer 1

All the answers are correct.

The following are the events that indicate that the assets book value may not be recoverable:

a. A significant decrease in market price.

b. A significant adverse change in how the asset is being used or in its physical condition.

c. A significant adverse change in legal factors or in the business climate.

d. An accumulation of costs significantly higher than the amount originally expected for the acquisition or construction of an asset.

e. A current-period loss combined with a history of losses or a projection of continuing losses associated with the asset.

f. A realization that the asset will be disposed of significantly before the end of its estimated useful life.