[MrsBing]

I’m trying to look up the correct approach in the FASB codification on how to record a capital asset that is transferred from one subsidiary to another. Does anyone know where in the codification this would be located? I’m currently looking in the Assets, PPE section but can’t find anything relating to subs.

Becker, Wiley Test Bank, and Ninja 10 Point Combo!

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[MCLKT]

What key words are you searching? Maybe try intercompany transactions or intercompany transfers.

Narrow down your search by sticking to the 800's.

Here is a site that might have what you are looking for?

https://accountinginfo.com/financial-accounting-standards/asc-800/845-nonmonetary-transaction.htm

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[MrsBing]

Unfortuanately I don't have the search view. I'll look in the non-monetary section. These are the scenarios that I'm trying to find:

First Example: Let’s say, the purchase value of asset is $160K but has fully depreciated on Taiwan’s books. When Taiwan transfers the asset to US they have assigned a FMV of $40K.

How should this be recorded on the US company books?

DR Asset 160K

CR A/D 160K

NBV 0 – No depreciation

OR

Dr Asset 40k

Cr A/D 0

NBV 40K – depreciate over useful life

OR

Dr Asset 40k

Cr A/D 40K

NBV 0 – No depreciation

Second Example: Let’s say the purchase value of asset is $160K, but Taiwan has only depreciated $60K of this and will intercompany charge US $100K for the remaining NBV. How should this be recorded on the US company books?

DR Asset 160K

CR A/D 60K

NBV 100K – depreciate over remaining useful life

OR

Dr Asset 100K

CR A/D 0

NBV 100K – depreciation over remaining useful life

Becker, Wiley Test Bank, and Ninja 10 Point Combo!

FAR: 89
REG: 87
AUD: 92
BEC: 75
Ethics: 90

Licensed Arizona CPA

[MrsBing]

I still can't find anything in the codification. Does anyone know how to account for this intercompany transfer? Would it be transferred at NBV or FV?

Becker, Wiley Test Bank, and Ninja 10 Point Combo!

FAR: 89
REG: 87
AUD: 92
BEC: 75
Ethics: 90

Licensed Arizona CPA

[MrsBing]

Found it in nonrecipocal exchanges. It's to be recorded at fair value.

Since it's between parent and sub, would the fair value and new depreciation be eliminated during consolidation to get back to the original book value?

Becker, Wiley Test Bank, and Ninja 10 Point Combo!

FAR: 89
REG: 87
AUD: 92
BEC: 75
Ethics: 90

Licensed Arizona CPA

[Author]

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