When the expected cost to dismantle and remove an asset exceeds the expected selling price of a depreciable asset, the difference is
A)added to cost to determine the depreciable base
B)deducted from accumulated depreciation in the year of disposal
C)not included in the calculation of depreciation expense
D)added to the depreciation expense in the year of disposal

Question

Quizplus · Accepted Answer

The difference between the expected cost to dismantle and remove an asset and its expected selling price, when the former exceeds the latter, is added to the cost of the asset to determine the depreciable base. This ensures that the total cost of the asset, including disposal costs, is spread over its useful life.

When the Expected Cost to Dismantle and Remove an Asset