Flashcards in Accounting for Nonmonetary Exchanges Deck (11):
What are the 2 groups that US GAAP requires that exchanges of nonmonetary assets be categorized in?
Have commercial substance and lack commercial substance
What causes an exchange to have commercial substance?
If the future cash flows change as a result of the transaction
What approach is used for a commercial substance?
Fair value approach
Under IFRS , does exchanges of similar assets generate revenue and gains?
If the exchange lacks commercial substance and no boot is received, is a gain recognized?
If the exchange lacks commercial substance and boot is paid, is there a gain recognized?
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
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
If a loss is suffered in a transaction lacking commercial substance, should the loss be recognized?
What situations do not recognize gain when a transaction lacks commercial substance?
Lacks commercial substance, boot paid, and no boot received