ch 9 study guide Flashcards
1
Q
Commercial Substance (2)
A
recognize gains and losses
2
Q
No Commercial Substance (no cash) (2)
A
defer gains, recognize losses
3
Q
No Commercial Substance (cash) (3)
A
partial gain, defer remaining, recognize losses
4
Q
What is the value of the item that I gave up? Did I give any cash?
A
Fair value (or book value of the item plus any cash paid) and add cash to the total value of the item given up.
5
Q
What is the value of the item that I got? Did I get any cash?
A
Fair value and cash must be accounted for separately.
6
Q
Do I have a gain or a loss? Do I recognize or defer the gain/loss?
A
Gain: Fair value > Book value.
Loss: Fair value < Book value.
7
Q
A
