If an asset value increases, what is the amount of the increase that is recognized according to GAAP?
A) The difference between the net asset cost and the new asset value.
B) The difference between the original cost of the asset and the new value of the asset.
C) The difference between the fair value and the expected future cash flows from the asset.
D) No increase is recognized.

Question

Quizplus · Accepted Answer

According to GAAP, increases in asset value are generally not recognized unless they are realized through a transaction, such as a sale. Unrealized gains are not typically recognized in financial statements.

If an Asset Value Increases, What Is the Amount of the Increase