Final answer:
The recorded value of an asset held for disposal at the end of each period is the lower of its carrying amount or fair value less costs to sell, after adjusting for any depreciation or impairment. Depreciation is halted once the asset is classified as 'held for sale', and any subsequent value changes are reported in profits or losses.
Step-by-step explanation:
The recorded value of an asset held for disposal at the end of each period is referred to as its 'carrying amount' or 'book value' after depreciation or any impairment losses are considered. When a company decides to dispose of an asset, International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) require the asset to be reclassified as 'held for sale'. At this point, the company must reassess the carrying amount of the asset and adjust it to the lower of its carrying amount or fair value less costs to sell.
After the reclassification, no further depreciation is recorded for the asset, and any subsequent increase or decrease in the fair value less costs to sell should be recognized in the profits or losses. It is essential that the value of the asset is measured accurately to provide transparency to investors and comply with financial reporting standards. This valuation should be performed at the end of each reporting period to reflect any changes in the market conditions or the asset's value while it remains unsold.