If the allocation of overhead causes the cost of the self-constructed asset to be greater than...
If the allocation of overhead causes the cost of the self-constructed asset to be greater than the fair value of the asset, the asset should be recorded at its __________ value with the excess recognized as a __________ in the current period.
a.future; loss
b.fair; gain
c.fair; loss
d.future; gain
Homework Answers
Ans : c. Fair, Loss
A self constructed asset cannot be recorded with a value more than its fair value.
For instance, if an asset is constructed and costs amounted to $ 50,000 but the same is available from market at $ 45,000 then the self constructed asset would be recorded at fair value and the remaining $ 5,000 should be considered as loss.
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