Under what circumstances should a company consider a reduction in the valuation of its property, plant, and...
Under what circumstances should a company consider a
reduction in the valuation of its property, plant, and
equipment (PP&E)?
Homework Answers
Answer
- The company should consider a reduction in the valuation of its Property, Plant & Equipment (PP & E) can be:
--When the asset’s performance has
depleted more than it should have.
--When there has been a damage to the PPE assets that is
prohibiting the asset to work efficiently.
--When the technology used in asset (if any) has gone obsolete,
leaving the said asset out-dated.
--When there has been a decline the market value (or fair market
value) of the property, Plant & Equipment.
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