Which of the following characteristics are required for recognition of a balance sheet asset?
A.The firm can sell this asset.
B.When the asset is obtained at a cost.
D.The asset is tangible.
E.Future economic benefits to the firm are probably.
The Correct Answer
D
The Explanation
An asset is recognized on the balance sheet only if it is probable that it will provide future economic benefits . Assets can be tangible or intangible. In some cases, assets are acquired without cost, but will be reported to the extent that they will provide future economic benefits, and thus have value.