Company A exchanges equipment with Company B, resulting in a gain for company A. The transaction has commercial substance. Which of the following statements is TRUE regarding this transaction as it related to company A? The entire amount of the gain would be recognized Only a part of the gain would be recognized None of the gain would be recongnized Because the transaction has commercial substance. Company A is in the same economic position as it was before the exchange took place.

Company A exchanges equipment with Company B, resulting in a gain for company A. The transaction has commercial substance. Which of the following statements is TRUE regarding this transaction as it related to company A? The entire amount of the gain would be recognized Only a part of the gain would be recognized None of the gain would be recongnized Because the transaction has commercial substance. Company A is in the same economic position as it was before the exchange took place.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 12GI

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Indicate whether each of the following statements is true or false. 1. Assets purchased on long-term credit contracts should be recorded at the present value of the consideration exchanged. 2. Companies account for the exchange of non-monetary assets on the basis of the book value of the asset given up or the fair value of the asset received. 3. Under IFRS, all gains on non-monetary exchanges are recognized, regardless of whether the transaction has commercial substance or not.
The cost of a nonmonetary asset acquired in exchange for another nonmonetary asset when the exchange has commercial substance is usually recorded at
Assets and liabilities, and income and expenses, when material, shall not be offset against each other. Which among the following is not an allowed offsetting? * a.foreign exchange gains and losses B.gain from the proceeds of selling equipment and the related selling expenditures C. share premium and organizational costs D."gain" from donated land and the related cost of transferring the title
The cost of a nonmonetary asset acquired in exchange for another nonmonetary asset when the exchange has commercial substance is usually recorded at A) either the fair value of the asset given up or the asset received, whichever one results in the largest gain (smallest loss) to the company. B) the fair value of the asset received if it is equally reliable as the fair value of the asset given up. C) the fair value of the asset given up, and a gain or loss is recognized. D) the fair value of the asset given up, and a gain but not a loss may be recognized.
When cash is involved in an exchange having commercial substance _________________. a. a gain or loss is computed by comparing the fair value of the asset received with the fair value of the asset given up b. only gains should be recognized c. gains or losses are recognized in their entirety d. only losses should be recognized
When accounting for asset exchanges, O when an exchange lacks commercial substance, either a gain or loss may be recognized. if the fair values of either the asset given up or the asset received cannot be ascertained, then the Board of Directors may assign an arbitrary value. O if a transaction lacks commercial substance, it is not recorded. an asset cannot be recognized at more than its fair value.
to be settled on Day 4. If the entity uses the trade date n entity commits to sell a financial asset on Day 1. The sale is accounting, which of the following statements is correct? The fair value change between Days 1 and 4 is recognized. a An 1. ses a. The asset is derecognized, and the gain or loss on the sale is recognized, on Day 4. The asset is derecognized, and the gain or loss on the sale is recognized, on Day 1. i The asset is derecognized only when the sale price is lly he collected.
Which statement is correct regarding derecognition of financial assets? A. Transfer of risks and rewards is evaluated by determining the transferee’s ability to sell the asset. B. A sale and repurchase transaction where the repurchase price is a fixed price is a transfer of financial asset that qualifies for derecognition. C. The entity shall continue to recognize the transferred asset in its entirety if the transfer does not qualify for derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset. D. If an entity neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, the entity shall continue to recognize the transferred asset to the extent of its continuing involvement.
if the exchange has commercial substance, what amount of gain is to be recognized?
PAS 16 states that if an exchange transaction causes a significant change in cash flows, the transaction has commercial substance. In transactions of this type, at what amount should the entity record the asset received? Book Value plus Boot Book Value Fair Value inminsic value
Which of the following nonmonetary exchange transactions may result in recorded gains or losses? A) Exchange of assets with a difference in future cash flows. B) Exchange of assets with no difference in future cash flows. C) Exchange of an equivalent interest in similar productive assets that causes the companies involved to remain in essentially the same economic position. D) Exchange of products by companies in the same line of business with no difference in future cash flows.
Under PFRS 15, when shall a consignor recognize revenue from its consignment sales? A When the consignor receives cash remittance from the consignee. B When it is probable that future economic benefits will flow to the consignor and the fair value of the revenue can be measured reliably. C When the consignor enters into a consignment contract with a consignee. D When the consignor satisfies its performance obligation under consignment contract.