Question

An entity may decide not to sell a long-lived asset (disposal group) classified as held for sale. It should therefore re-classify the long-lived asset (disposal group) as held and used. As a result of re-classification:_______.

Answer 1

Options:A. The disposal group will be measured at the lower of carrying amount or fair value at the date

of the decision not to sell.

B. The results of operations of a reclassified component of an entity will be reported

prospectively in continuing operations.

C. Depreciation on individual reclassified long-lived assets is reflected in their measurement.

D. Any assets removed from a disposal group that are to be sold must continue to be measured

as a group.

Answer:C. Depreciation on individual reclassified long-lived assets is reflected in their measurement.

Explanation:A disposal group is a collection of assets or liabilities of an organisation that has been classified as held for sale. The depreciation of these disposal group may not be considered or measured, they usually measured According to a lower of carrying amount and fair value less costs to sell. They are presented separately in the statement of financial position. As a result of reclassification of the disposal group,the Depreciation on individual reclassified long-lived assets is reflected in their measurement.