hard · Financial Accounting assets
Marlow Inc. holds a parcel of land it intends to sell, classified as held-for-sale on Sept 30. The land's carrying amount is $2,000,000; fair value less costs to sell is $1,750,000 on Sept 30 and recovers to $1,900,000 by Dec 31 (year-end). The land had a prior impairment loss of $300,000 recognized in an earlier period while held-and-used.
What amount of gain or loss does Marlow report for the quarter ending Dec 31 related to this asset, under U.S. GAAP?
- A $150,000 recovery gain, limited to the increase in fair value less costs to sell during the period the asset was held for sale
- A $0 gain, because gains on assets held for sale may never be recognized under U.S. GAAP
- A $300,000 recovery gain, restoring the asset to its original carrying amount before the earlier held-and-used impairment
- A $250,000 recovery gain, recovering the full write-down taken upon initial held-for-sale classification
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