CFP

By Investopedia AAA

Characteristics and Income Taxation of Business Entities - Disposition

Disposition

Business itself:
If a business is disposed of prior to the end of the amortization period, the company/owner can deduct any remaining deferred start-up costs. However, they can deduct these deferred start-up costs only to the extent they qualify as a loss from a business.

Business Assets:
Depreciable assets can be: exchanged, retired, or sold.

After the disposition of an asset (depreciable), an accounting entry is made to recognize any unrecorded depreciation expenses up to the date of the disposition. The asset's cost and accumulated depreciation are then removed from the respective general ledger accounts. The losses or gains (realized) associated with the disposition are recorded in a separate account and appear on the income statement named as either income (gains) or expense (losses).

Sample Questions 1 - 6

You May Also Like

Related Articles
  1. Trading Strategies

    The 10 Worst Mistakes Beginner Traders ...

  2. Trading Strategies

    Rise and Shine With This Pre-Market ...

  3. Options & Futures

    Avoid These 10 Mistakes When Trading ...

  4. Trading Strategies

    5 Ways To Adapt To Tough Markets

  5. Professionals

    Want To Be A Financial Planner? Eye ...

Trading Center