Heritage Assets Have Characteristics That Create Doubt About Whether or Not

question 60

Multiple Choice

Heritage assets have characteristics that create doubt about whether or not they satisfy the definition of an asset.These characteristics include:

• A) They are not expected to generate net economic benefits.
• B) They never generate cash inflows.
• C) They are unlikely ever to be sold.
• D) They are not expected to generate net economic benefits and they are unlikely ever to be sold.

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Definitions:

Operating Leases

Leasing agreements for assets where the lessor retains ownership, and the lessee uses the asset for a specified period.

Financial Leases

Long-term leases that are non-cancellable and include terms to buy the asset at the end of the lease period.

Equity Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a stock at a specified price before a certain date.

CCA Tax Shield

A deduction that allows businesses to depreciate the cost of an asset over time for tax purposes, reducing their taxable income.