Final answer:
A company may record an involuntary disposal of an asset when the asset is damaged beyond repair, stolen or lost, or seized by authorities due to legal issues.
Step-by-step explanation:
An involuntary disposal of an asset refers to the situation where a company is forced to get rid of an asset against its will. This can happen under a few circumstances:
- If the asset is damaged beyond repair and cannot be used anymore.
- If the asset is stolen or lost.
- If the asset is seized by authorities due to legal issues.
For example, if a company's delivery truck gets into a major accident and becomes completely unusable, the company would record an involuntary disposal of the truck.