Non Monetary Exchanges Flashcards Preview

Yaeger FAR > Non Monetary Exchanges > Flashcards

Flashcards in Non Monetary Exchanges Deck (21):
0

3 exception criteria for non monetary exchange asset?

1 FV of asset received and asset given up are both unknown or

2 the exchange transaction is done to facilitate sales or

3 the transaction lacks commercial substance

1

What is required for the transaction to lack commercial substance? 2

1 cash flows do not Change in their risk, timing and amount and

2 do not include tax effects when considering the cash flows

2

In exchange of nonmonetary assets, if no exception exists then use...

The Fair value method

3

Fair value method

Calculate the realized gain/loss of fair value of assets given up
Vs. CV of assets given up

4

Under the fair value method, if you do not know the fair value of assets given up, then...

Use fair value of assets received

5

Recognized losses under the fair value method:

Why should you recognize them?

Recognize realized loss because of conservatism

6

Recognized gains under the fair value method:

Why should you recognize them?

Recognize realized gain because the exception criteria are
Not met

7

Nonmonetary transactions:

When the fair value of asset received and asset given up are both unknown, what method is used?

Carrying value method is used

8

Nonmonetary transactions:

When the fair value of asset received and asset given up are both unknown, do not calculate...

Realized gain/loss. It's not needed

9

Journal entry for fair value method, when no exception criteria are meth and there is a gain and a loss on the transaction.

Asset received. (Fair value)
Loss. (Calculated)
Accumulated depreciation (On books)
Asset given up. (Historical cost)
Gain. (Calculated)

10

Journal entry for nonmonetary exchange when criteria of Fair value of asset received and asset given up are both unknown is met.

Asset received. (Plug)
Accumulated depreciation. (On books)
Asset given up. (Historical cost)

11

In a nonmonetary exchange, when an exchange transaction is done to facilitate sales or lacks commercial substance:

Realized gain or loss is calculated when...3

1 no boot is paid or received

2 boot is paid

3 boot is received

12

Calculate the realized gain of loss on nonmonetary transactions 2

1 Fair value of assets given up va. CV of assets given up

2 if you do not know the fair value of assets given up, then
Just use the fair values of assets received

13

In a nonmonetary exchange, when an exchange transaction is done to facilitate sales or lacks commercial substance:

What is recognized when no boot is paid or received?

Recognize realized loss

Do not recognize realized gain

14

In a nonmonetary exchange, when an exchange transaction is done to facilitate sales or lacks commercial substance:

What is the journal entry where no boot is paid or received?

Asset received. (Plug)
Loss. (Calculated)
Acc. Depreciation. (On the books)
Asset given up. (Historical cost)

15

In a nonmonetary exchange, when an exchange transaction is done to facilitate sales or lacks commercial substance:

What is recognized when boot is paid?

Recognize realized loss

Do not recognize realized gain

16

In a nonmonetary exchange, when an exchange transaction is done to facilitate sales or lacks commercial substance:

What is the journal entry to record boot paid?

Asset received. (Plug)
Loss. (Calculated)
Acc. Depreciation. (On the books)
Asset Given up. (Historical cost)
Cash. (Boot paid)

17

In a nonmonetary exchange, when an exchange transaction is done to facilitate sales or lacks commercial substance:

When boot is received what is recognized?

recognize realized loss

Recognize some realized gain prorata

18

In a nonmonetary exchange, when an exchange transaction is done to facilitate sales or lacks commercial substance:

When boot is received how is some realized gain recognized pro rata on the transaction?

Recognized gain =

[FV of Boot/(FV of boot + FV of Asset Received)] x realized gain

19

In a nonmonetary exchange, when an exchange transaction is done to facilitate sales or lacks commercial substance:

What is the journal entry for boot received when both a loss and gain exist.

Cash. (Received)
Asset received. (Plug)
Loss. (Calculated)
Acc. Depreciation (On the books)
Asset given up. (Historical cost)
Gain. (Calculated)

20

Major exception:

Recognize the entire gain for monetary transactions where...

Boot received is 25% or more of the fair value of the exchange