FAR 3.6 - Nonmonetary Transactions Flashcards
Gains and losses are always recognized in exchanges having commercial substance and are computed as:
The difference between fair value and book value of the asset given up
How is the new asset received basis in a monetary exchange calculated?
The cash given up plus the fair value of asset given up
In exchanges lacking commercial substance and no boot is received, how is a gain recognized?
A gain is not recognized when no boot is received
In exchanges lacking commercial substance and boot is paid, how is a gain recognized?
If less than 25% of total consideration, no gain is recognized
In exchanges lacking commercial substance and boot is received, how is a gain recognized?
If boot received is less than 25% of the total consideration, proportion of gain is recognized
If boot received is greater than 25% of the total consideration, the entir gain is recognized
Whenever a non monetary asset is involuntarily converted to cash, the gain or loss is:
Recognized in full