Question

Lisa and Elizabeth are both calculating asset values to determine if any previously impaired assets are further impaired. Instead of additional asset impairment, they found that they each had an asset that had increased in value. Lisa recorded this increase in value, but Elizabeth did not. Why?

Answer 1

Answer:

The correct answer is Lisa's asset is being held for disposal, and Elizabeth's asset is currently in use.

Explanation:

The assets should be recognized in the balance sheet when it is probable that they will obtain benefits or economic returns for the company in the future, and provided that they can be valued reliably. The accounting recognition of an asset also implies the simultaneous recognition of a liability, the decrease of another asset or the recognition of an income or other increases in equity. depending on the accounting context.

An asset is recognized in the balance sheet when it is probable that future economic benefits will be obtained for the company, and in addition the asset has a cost or value that can be measured reliably ”,“ an asset is not recognized in the balance sheet when it is considered unlikely that, from the corresponding disbursement, economic benefits will be obtained in the future. Instead, such a transaction leads to the recognition of an expense in the income statement