[greenli2]

Can someone help me out, with a non monetary exchange lacking commercial substance, what is the formula to calculate gain:

Is it

Cash / (Cash + FV of Asset Received)

or

Cash / (FV of Asset received)

Thanks!

BEC - 2/13 - 87
Audit - 4-16 - 99
Reg - 5-29 - 94
Far- 8-13 - 97

I use becker self-study, final review, flash cards, wiley test bank, and I make my own flash cards using studyblue.com

[Kcoolby]

Well first you have to determine if boot (cash) was received or paid. If boot was paid or there was no boot at all, there is no gain.

If boot was received, then you recognize a gain in proportion to the amount of boot and the total value received. The total value received is the FV of the asset YOU gave up and the cash you received.

IDK if it was said in Becker online lecture but def in my class, but with non-monetary exchanges you need to assume the FV value of the asset you are trading is = to the FV value of the asset you are receiving.

So you always need to recognize a gain based on the FV – A/B of the asset you owned

FAR - 7/19/2012 - 95
REG - 8/2/2012 - 91
AUD - 8/15/2012 - 97
BEC - 8/31/2012 - 90

[Kcoolby]

Btw, I see you got a 94 on the Reg exam, I just took reg a few days ago. How did you feel coming out of the exam? I came out of the exam not sure at all if I passed or not.

I didn't feel the testlets got harder as I went on. I also know I definitely got the research question wrong :(. Did you nail your research question? And how did you feel about the TBS? I feel Okay on the TBS, since I think I at least understood the general idea of most of them. It was just the minor details that were screwing with me.

FAR - 7/19/2012 - 95
REG - 8/2/2012 - 91
AUD - 8/15/2012 - 97
BEC - 8/31/2012 - 90

[greenli2]

Thanks:

So just to be clear its:

Cash / FV of Asset given up (not including cash given up)

BEC - 2/13 - 87
Audit - 4-16 - 99
Reg - 5-29 - 94
Far- 8-13 - 97

I use becker self-study, final review, flash cards, wiley test bank, and I make my own flash cards using studyblue.com

[greenli2]

I felt good on the M/C, but the TBS i thought for sure I bombed, there was one out of left field which i thought was the throw away, and another that i got wrong because i applied the wrong concepts. When i left the exam i thought i failed due to the TBS, but i guess i did well enough on the rest of them…

BEC - 2/13 - 87
Audit - 4-16 - 99
Reg - 5-29 - 94
Far- 8-13 - 97

I use becker self-study, final review, flash cards, wiley test bank, and I make my own flash cards using studyblue.com

[Kcoolby]

Ah okay well thats good to hear!! Yea I actually didn't have a TBS that was like wayyy out there. I had a couple of difficult ones but eventually I was able to slowly work through them. Definitely didn't get them right though. I'm just more worried about my research question since I definitely got it wrong which really pisses me off.

Anyways It's cash / (FV of asset given up + Cash Received)

Then you multiply that by the gain you REALIZED which gives you the gain you SHOULD recognize. Be careful because the A/B of the asset you received is now a plug-in number 🙂

FAR - 7/19/2012 - 95
REG - 8/2/2012 - 91
AUD - 8/15/2012 - 97
BEC - 8/31/2012 - 90

[Kuso121]

I was looking through total consideration formula and I found this, but this is wrong.

The total consideration should be cash / [FV of asset received + cash]

Just to help anyone that is looking for this formula in the future.

[Author]

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