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23 August, 06:42

On December 31, 20X2, Brooks Co. decided to end operations and dispose of its assets within three months. At December 31, 20X2, the net realizable value of the equipment was below historical cost. What is the appropriate measurement basis for equipment included in Brooks' December 31, 20X2, Balance Sheet?

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  1. 23 August, 08:57
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    The answer is: Net realizable value

    Explanation:

    Since Brooks Co. is being liquidated historical costs are no longer relevant. The going concern principle (a business will remain in operation for the foreseeable future) is no longer applicable.

    The only relevant amounts for Brooks Co. are the net realizable amounts they can get from the sale of their assets.
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