If the value of an asset that has been written down later increases, to what extent may the related gain be recognized?
A) up to the amount of the original loss
B) no remeasurements may be recognized
C) none of the gain may be recognized
D) up to the fair market value of the asset

Question

Quizplus · Accepted Answer

Once an asset has been written down, any subsequent increase in value may only be recognized up to the amount of the original loss. This is known as the ceiling rule. Therefore, choice A is correct. Choices B, C, and D are incorrect as they either state no recognition of gain or allow recognition of gain beyond the original loss.

If the Value of an Asset That Has Been Written