F2 - Accounting for Non-monetary exchanges Flashcards

1
Q

If projected cash flows after the exchange are not expected to change significantly, then the exchange…

A

Lacks commercial substance.

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2
Q

If the exchange lacks commercial substance and no boot is received, then

A

No gain is recognized

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3
Q

If the exchange lacks commercial substance and no boot is paid, then

A

No gain is recognized

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4
Q

If the exchange lacks commercial substance and boot received is less than 25% of the total consideration received then

A

A proportional amount of the gain is recognized.

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5
Q

If a nonmonetary exchange has commercial substance, the transaction is accounted for using

A

The fair value of the asset surrendered or received, whichever is more evident.

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6
Q

When a nonmonetary transaction has commercial substance, gains and losses are recognized

A

based on the difference between the fair value and the book value of the asset given up.

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