If a Government Elects to Capitalize Certain Works of Art

question 37

Multiple Choice

If a government elects to capitalize certain works of art and similar assets, which of the following statements is true relative to depreciation on those assets?

• A) Donated assets cannot be depreciated.
• B) All of the capitalized assets must be depreciated.
• C) All exhaustible works of art and similar assets must be depreciated.
• D) The government may elect to omit all depreciation.

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Definitions:

Performance Hurdle

A benchmark or specific target set that must be achieved before certain rewards, such as bonuses or stock options, are granted.

Repriced Option

An option whose terms, specifically the strike price, have been adjusted, typically to make the options more favorable for the holder following declines in the market price of the underlying asset.