Question

when a fully depreciated plant asset is discarded, and no gash is received in return on the disposal, neither a gain nor a loss is recorded on the disposal

Answer 1

When a fully depreciated plant asset is discarded without receiving any cash, neither a gain nor a loss is recorded.

Step-by-step explanation:

When a fully depreciated plant asset is discarded and no cash is received in return on the disposal, neither a gain nor a loss is recorded on the disposal.

This is because the asset has already been fully depreciated, meaning its cost has been expensed over its useful life and its book value is zero. As a result, there is no remaining value to recognize as a gain or loss on disposal.

For example, if a company has a fully depreciated piece of machinery and decides to dispose of it without receiving any cash or other consideration, they would not record a gain or loss on the disposal.