Which of the following best describes the gain or loss on the disposal of a non current asset?
Ans. The correction of forecasting errors when the asset’s useful life and residual values were estimated.
Need help with the problem. Really confused.
If depreciation was completely accurate so that the asset’s net book value was always equal to its sale value, there would be no gain/loss on disposal.
Depreciation depends on estimating residual value and asset life. If these are wrong, there will be a gain or loss on disposal.
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