Under SFAS 144, depreciation of an asset that is deemed to be held for sale should (a) continue until disposition of the asset (b) cease once the asset has been deemed to be held for sale © be reversed to the extent of accumulated depreciation on the asset (d) be set to equal depreciation recognized for tax purposes if that asset is deemed to be held for sale during the last quarter of the fiscal year. Can someone help me with this?
b) but I guess I don’t know how to explain it except that’s the rules.
Check on page 5 in the document linked below: The accounting model for long-lived assets to be disposed of by sale is used for all long-lived assets, whether previously held and used or newly acquired. That accounting model retains the requirement of Statement 121 to measure a long-lived asset classified as held for sale at the lower of its carrying amount or fair value less cost to sell and to cease depreciation (amortization). http://72.3.243.42/pdf/fas144.pdf