[MustPass1988]

I just came across this question on the Wiley test bank in the Fixed Asset section and it’s not making sense to me.

When the FV is determinable, a nonreciprocal transfer of a nonmonetary asset to another entity should be recorded at the:

Answer) FV of the asset transferred, and a gain or loss should be recognized on the disposition of an asset

I took “nonreciprocal” to mean that the exchange lacked commercial substance, therefore it should be recorded at the lower of 1) FV given up + cash paid 2) FV received 3) BCV given up + cash paid.

AUD: PASSED [81]; Expired, retaking August 23rd
BEC: PASSED [83]; Expired, retaking July 11th
REG: PASSED [83]
FAR: FAILED [64]; Retaking May 23rd

[Anonymous]

I think the transaction do have commercial substance because the exchange was non-reciprocal, meaning that the economic position of the company had change

The asset should be recorded at its FV and a gain or loss recognize at that moment

If it was a reciprocal exchange, then it would had lacked commercial substance because the company would be in the same position than before the transfer

[Author]

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