Final answer:
Assets within a component that is held for sale are not depreciated or amortized. Instead, they are reported at their lower of cost or net realizable value.
Step-by-step explanation:
The correct answer is b- false. Assets within a component that is held for sale are not depreciated or amortized. Instead, they are reported at their lower of cost or net realizable value. This means that the assets are recorded at the lower of their original cost or their estimated selling price minus any costs necessary to make the sale.
For example, if a company is holding a piece of equipment for sale and the equipment's original cost was $10,000, but its estimated selling price is $7,000 after considering the costs of advertising and refurbishing, the equipment would be reported at $7,000.
This treatment ensures that the assets are not overstated on the company's financial statements as they are being held for sale and not actively used to generate revenue.