Final answer:
The lower of CA or FV less cost of disposal refers to selecting the lower value between the carrying amount and the fair value minus the cost of disposing of the asset.
Step-by-step explanation:
The question is asking to compare the lower of two values, which are the carrying amount (CA) and the fair value (FV) less the cost of disposal. The lower of these two values would be chosen in certain accounting scenarios, such as when determining the value of an asset or inventory.
For example, let's say the carrying amount of an asset is $10,000 and the fair value less the cost of disposal is $8,000. In this case, the lower value would be $8,000, and that would be the value used in the accounting records.
So, the lower of CA or FV less cost of disposal refers to selecting the lower value between the carrying amount and the fair value minus the cost of disposing of the asset.