[jasonrobbins]

Becker and Wiley have conflicting calculations as how to calculate the gain for the gains/losses for these exchanges.

Becker has gain/loss is: FV of Asset Given Up – BV of Asset Given Up

Wiley has the calculation as: Sticker Price of New Asset Acquired / Sales price of Asset Sold – BV of Asset Given Up

How do you know which one to use? Which is the one you will most likely see on test day?

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[jasonrobbins]

Meant to post this in FAR, sorry…

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[jasonrobbins]

Meant to post this in FAR, sorry…

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[jasonrobbins]

Anyone?

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[jasonrobbins]

Anyone?

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[teeteenounouche]

I had a question last night that I went over:

Per ASC Topic 845, exchanges that lack commercial substance are accounted for at book value. Although ASC Topic 845 prohibits recognition of a gain on these exchanges, it requires the recognition of any loss. Since the carrying value of the asset surrendered by Scott exceeds the fair market value of the asset received, Scott realized a loss on this exchange. Scott should value the asset received at its fair market value. The difference between the carrying amount of the asset surrendered and its fair market value (measured by the fair market value of the asset received in this case) should be recognized as a loss.

so, BV of Asset given up – FMV of asset received = loss recognized

Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!

CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree

[teeteenounouche]

I had a question last night that I went over:

Per ASC Topic 845, exchanges that lack commercial substance are accounted for at book value. Although ASC Topic 845 prohibits recognition of a gain on these exchanges, it requires the recognition of any loss. Since the carrying value of the asset surrendered by Scott exceeds the fair market value of the asset received, Scott realized a loss on this exchange. Scott should value the asset received at its fair market value. The difference between the carrying amount of the asset surrendered and its fair market value (measured by the fair market value of the asset received in this case) should be recognized as a loss.

so, BV of Asset given up – FMV of asset received = loss recognized

Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!

CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree

[jasonrobbins]

Why does Becker always use the FMV of the asset given up? Does that only apply when the FV of the Asset given up = the asset received?

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[jasonrobbins]

Why does Becker always use the FMV of the asset given up? Does that only apply when the FV of the Asset given up = the asset received?

AUD- 97 1x
REG- 81 1x
BEC- 79 1x
FAR- 88 1x

DONE!

10/1/12 to 2/28/14

[teeteenounouche]

Yes, I believe so which is the same thing I think Wiley is saying below in a different way:

The difference between the carrying amount of the asset surrendered and “its fair market value (measured by the fair market value of the asset received in this case)” should be recognized as a loss.

Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!

CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree

[teeteenounouche]

Yes, I believe so which is the same thing I think Wiley is saying below in a different way:

The difference between the carrying amount of the asset surrendered and “its fair market value (measured by the fair market value of the asset received in this case)” should be recognized as a loss.

Florida:
AUD: 73, 81! Thank you Lord!
BEC: 73, 77! Thank you Lord! and WTB
REG: 71, 82! Thank you Lord! and A71
FAR: 72, 78! Thank you God and my Mommy in Heaven!

CPA Excel, Ninja Notes & Audio, Wiley Test Bank, CPAreviewforfree

[Anonymous]

I use both becker & wiley and this works for me every time:

gain = fmv of asset given up – bv of asset given up

if the fmv of asset given up isn't given, use the fmv of the asset received

if both aren't given, then you'd use the bv to record the exchanged asset (the one you received)-but no gain would be recorded and it'll just go to acc dep.

[Anonymous]

I use both becker & wiley and this works for me every time:

gain = fmv of asset given up – bv of asset given up

if the fmv of asset given up isn't given, use the fmv of the asset received

if both aren't given, then you'd use the bv to record the exchanged asset (the one you received)-but no gain would be recorded and it'll just go to acc dep.

[Author]

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