Chapter 8: Property, Plant, and Equipment

Question 1

An asset classified as held for sale has been reclassified as held and used. The asset is measured at the

Answer 1

The lower of (1) the carrying amount before the asset was classified as held for sale, minus any depreciation that would have been recognized if the asset had been held and used, or (2) the fair value at the date of the decision not to sell.

Question 2

Property, plant, and equipment are conventionally presented in the balance sheet at

Answer 2

Historical cost less depreciated portion thereof.

Question 3

What is the carrying amount of PPE?

Answer 3

Historical cost less depreciation and impairment losses

Question 4

Is PPE revalued upward?

Answer 4

No. Under GAAP, PPE cannot be revalued upward to reflect market, fair value, or appraisals that are above the carrying value.