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Flashcards in Accounting for Nonmonetary Exchanges Deck (11):
1

What are the 2 groups that US GAAP requires that exchanges of nonmonetary assets be categorized in?

Have commercial substance and lack commercial substance

2

What causes an exchange to have commercial substance?

If the future cash flows change as a result of the transaction

3

What approach is used for a commercial substance?

Fair value approach

4

Under IFRS , does exchanges of similar assets generate revenue and gains?

No

5

If the exchange lacks commercial substance and no boot is received, is a gain recognized?

No

6

If the exchange lacks commercial substance and boot is paid, is there a gain recognized?

No

7

If the exchange lacks commercial substance and the boot received is less than 25% of the total consideration received, is gain recognized?

Yes, a proportional amount, ratio is total boot received/the total consideration received, and then the proportion of the total gain is recognized

8

If the exchange lacks commercial substance and boot received is greater than 25%, is a gain recognized?

Yes, gains and losses are recognized in the entirety

9

If a loss is suffered in a transaction lacking commercial substance, should the loss be recognized?

Yes

10

What situations do not recognize gain when a transaction lacks commercial substance?

Lacks commercial substance, boot paid, and no boot received

11

Whenever a nonmonetary asset is involuntarily converted to cash, is a gain or loss recognized?

Yes, in its entirety