Ppe

Front 1

Nonmonetary Transactions

Back 1

Both exchanges & nonreciprocal transfers that involve little or no monetary assets or liabilities are referred to as nonmonetary transactions.

Nonmonetary transaction should be based on the FV of the assets exchanged, whichever is clearly determinable.

If the FV is not determinable these transactions should be based on Recorded Amounts if the following conditions apply:
1. Fair value of the assets exchanges are not easily determinable & available
2. Transaction lacks commercial substance
3. Even exchange that is used to facilitate sales to customers.

Front 2

Monetary Assets & Liabilities

Back 2

Assets & liabilities whose amounts are fixed int erms of units of currency by K or otherwise.

Ex: cash, A/R, N/R, A/P & N/P in cash

Front 3

NonMonetary Assets and Liabilities

Back 3

Assets & liabilities other than monetary ones.

Ex: Inventories, Invest. in C/Stock, PPE, Liab for rent colected in advance

Front 4

Commercial Substance

Back 4

A nonmonetary transaction has commercial substance when:

1. Cash flow is significantly affected by the exchange
2. Value of the asset received is significantly different than the value of the asset transferred

Front 5

NO Commercial Substance

Back 5

The assets exchanges are recorded at book value (after accounting for impairment) = No GAINS/LOSSES should be recognized.

The recipient of BOOT would realize some amount of GAIN

Front 6

Boot

Back 6

A small monetary consideration included in exchanges of nonmonetary assets, even though the exchange is essentially nonmonetary.

1. The recipient opf the boot realizes GAIN on the exchange to the extent the monetary receipt exceeds a proportionate share of the recorded amount of teh asset surrendered.

2.The entity paying the boot should not recognize any GAIN but record the asset at the monetary consideration given + recorded amt. of the non monetary asset given.

3. If the terms of the exchange indicate LOSS, should recognize the entire loss

Front 7

Exchanges

Back 7

An excahnge is a reciprocal transfer between an enterprise & another entity that results in the enterprise's acquiring assets or satisfying liabilities by surrendering assets. Reciprocal transfer of a non-monetary asset shall be deemed an excahnge only if the transferor has NO substantial involvement after the transfer and have transferred risks & rewards of the asset also.

Front 8

Nonreciprocal Transfer

Back 8

Transfer of assets or services in 1 direction, either from an enterprise to its owners or another entity or from owners or another entity to the enterprise.

Recorded @ their FAIR VALUE

Ex: acquisition of its outstanding stock

Front 9

Guidance on nonmonetary transactions Does Not Apply to the following

Back 9

1. Exchange of a business for a business
2. Transfer of nonmonetary assets solely between companies (persons) under common control
3. Acquisition of nonmonetary assets by issuing capital stock of an enterprise
4. Stock that was received as stock dividends & stock splits
5.Transfer of assets for an enquity ownership
6. The pooling of assets under joint taking intended to find natural gas...
7. Tansfer of financial assets