【正文】 ived Asset received recorded G/L recognition FMV received FMV received Less: NBV exchanged G/L FMV received Less: NBV exchanged Less: Boot given G/L FMV received Less: NBV exchanged Add: Boot received G/L 40 C Nonmoary Exchange 11. Situation 7 a) Conditions ? Neither FMV is determinable ? Record asset received NBV of assets exchanged ? No G/L recognized if no boot involved ? G/L is recognized boot involved b) Accounting treatment Exception ① 41 C Nonmoary Exchange 11. Situation 7 Example: A machine (cost, $10,000。 Acc DEP, $3,000) is traded for land and $500 cash. Answer: Dr. Land $4,500 Dr. ACC DEP 3,000 Dr. Loss 2,000 Dr. Cash 500 Cr. Machine $10,000 FMV (machine) Less: NBV Loss $5,000 (7,000) $2,000 To record land (received) on B/S To calculate loss Asset exchanged Asset received FMV (machine) Less: boot received Land $5,000 (500) $4,500 To calculate Land cost Boot received Record asset received FMV of asset exchanged Boot given Recognize Loss since FMV exchanged NBV exchanged FMV 1 + Boot received 33 C Nonmoary Exchange 7. Situation 4: a) Conditions ? FMV exchanged is not determinable。 D Cost (P243) M: Computer Software Costs (P243244) M9 2 A. Acquisition Costs 3 A Acquisition Cost 1. Characteristics of Fixed Assets a) Acquired for use in operations and not for resale b) Longterm in nature and subject to depreciation c) Possess physical substance d) Fluctuate with changes in the price level Not land Tangible 2. Classification of Fixed Assets a) Land b) Building c) Equipment d) Others with physical existence 4 A Acquisition Cost 3. Valuation of Fixed Assets a) Purchased: valued Historical costs ? Stated purchase price ? Incidental costs = bring it to the location and condition necessary for it intended use b) Donated: valued FMV if known ? Valued NBV if FMV is unknown c) Selfdeveloped: valued DM + DL + VOH + % of FOH In addition, if the entity incurs a liability associated with future retirement of asset, the fair value of that obligation will be add to the carrying value of the asset. 5 A Acquisition Cost 4. Cost of Equipment a) Formula Invoice price – Cash/Trade discount + Freightin + Installation charges + Sales amp。Financial Accounting and Reporting 9: Fixed Assets 1 Fixed Assets A: Acquisition Costs (P229) B: Capitalization of Interest (P229231) C: NonMoary Exchange (P231235) D: Purchase of Group of Fixed Assets (P235235) E: Capital amp。 Other Intangible Assets (P240242) K: Reporting of Cost of StartUp Activities (P242) L: R amp。 Acc DEP, $3,000) and $500 cash are traded for land. Answer: Dr. Land $5,500 Dr. ACC DEP 3,000 Dr. Loss 2,000 Cr. Machine $10,000 Cr. Cash 500 FMV (machine) Less: NBV Loss $5,000 (7,000) $2,000 To record land (received) on B/S To calculate loss Asset exchanged Asset received FMV (machine) Add: boot given Land $5,000 500 $5,500 To calculate Land cost Boot given Record asset received FMV of asset exchanged + Boot given Recognize loss since FMV exchanged NBV exchanged FMV 1 + Boot given 31 C Nonmoary Exchange 6. Situation 3 a) Conditions b) Accounting treatment FMV 1 + Boot received ? FMV of asset exchanged (given up) is determinable ? The transaction has mercial substance and is not to facilitate sale ? Boot received ? Record asset received FMV of asset exchanged Boot given ? G/L determination Boot received does not affect G/L calculation FMV exchanged Less: NBV exchanged G/L 32 C Nonmoary Exchange 6. Situation 3 Example: A machine with FMV of $5,000 (cost, $10,000。 Acc DEP, $3,000) and $500 cash are traded for land with FMV of $6,000. Answer: Dr. Land $6,000 Dr. ACC DEP 3,000 Dr. Loss 1,500 Cr. Machine $10,000 Cr. Cash 500 FMV (land) Less: NBV Less: Boot Loss $6,000 (7,000) (500) $1,500 To record land (received) on B/S To calculate loss Asset exchanged Asset received Boot given Record asset received FMV of asset received Recognize loss since FMV received (NBV exchanged + Boot given) FMV 2 + Boot given 37 C Nonmoary Exchange 9. Situation 6: a) Conditions ? Record asset received FMV of asset received ? G/L calculation is determined by the difference ? FMV exchanged is not determinable but FMV received determinable ? The transaction has mercial substance and not to facilitate sale ? Boot received b) Accounting treatment FMV 2 + Boot received FMV received Less: NBV exchanged Add: Boot received G/L 38 C Nonmoary Exchange 9. Situation 6 Example: A machine (cost, $10,000。 Acc DEP, $4,000) and $3,000 in cash are traded for land. The configuration of cash flow does not significantly differs after exchange Answer: Dr. Land $10,000 Dr. ACC DEP 4,000 Cr. Machine $11,000 Cr. Cash 3,000 To record land To calculate Land cost NBV of machine Add: Boot given Land $7,000 3,000 $10,000 Record asset received NBV of assets exchanged + Boot given Exception ② ,③ + Boot given 46 C Nonmoary Exchange 13. Situation 9 Example 2: A machine with a FMV $5,000 (cost, $11,000。 Revenue Expenditures 56 E Please see P237