F2 - Accounting for Non-monetary exchanges Flashcards
If projected cash flows after the exchange are not expected to change significantly, then the exchange…
Lacks commercial substance.
If the exchange lacks commercial substance and no boot is received, then
No gain is recognized
If the exchange lacks commercial substance and no boot is paid, then
No gain is recognized
If the exchange lacks commercial substance and boot received is less than 25% of the total consideration received then
A proportional amount of the gain is recognized.
If a nonmonetary exchange has commercial substance, the transaction is accounted for using
The fair value of the asset surrendered or received, whichever is more evident.
When a nonmonetary transaction has commercial substance, gains and losses are recognized
based on the difference between the fair value and the book value of the asset given up.