[startupcfo]

When computing purchasing power gain or loss on net monetary items, which of the following accounts is classified as nonmonetary?

D.
Accumulated depreciation of equipment

Monetary assets are cash or items whose amounts are fixed in terms of numbers of dollars. All of the assets are monetary assets except for accumulated depreciation.

My understanding that “nonmonetary” = “barter”. Am I wrong or incomplete to say that?

Why is depreciation NOT considered “fixed in terms of numbers of dollars”. All 4 of these choices have definitive dollar values, right?

BEC - 87 | 02/28
REG - 70 | 06/10, REMATCH | 08/30
AUD - XX | 09/10
FAR - XX | 12/10

[Missy]

you can barter for an asset, but bartering itself is not an asset.

The definition above says an asset is only considered monetary when the amont is fixed (although I've never heard it described that way.) Accumulated depreciation is not fixed, it changes every period, but even that aside its a contra account to an asset.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Anonymous]

Wow. I have never heard of these terms, so I looked it up:

Monetary assets and liabilities are fixed in dollars regardless of changes in inflation and deflation. Holding monetary assets during periods of inflation will result in a loss of purchasing power.

Nonmonetary assets and liabilities fluctuate in value with inflation and deflation.

Monetary assets include cash, nonconvertible bonds, accounts receivable, notes receivable, and long term receivables.
Nonmonetary assets include marketable common stock, inventory, investment in subsidary, property plant and equipment, and intangible assets.

Contra accounts are the same classification as their related account. So, accumulated depreciation would be nonmonetary because property, plant, and equipment are nonmonetary.

Now that I've looked it up, it still makes very little sense to me. Can anyone further explain?

[Author]

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