06-20-2006, 01:37 AM
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by insaan</i>
<br />another question..
If an asset is acquired in exchange for another (non monetory/monetory&non monetary) asset/assets (whether similar or dissimilar in nature)16.24
The cost will be measured at the fair value (of asset received OR given up?) unless
a. the exchange transaction lacks commercial substance 16.25 or
b. the fair value of neither the asset received nor the asset given up is reliably measurable16.26
If the acquired item is not measured at fair value, its cost is measured at the carrying amount of the asset given up
cost will be measured at the fair value (of asset received OR given up?)and if its measured at F.v
of asset given up like carrying amount then what about gain/loss on disposal as which arises
in case of disposal against monetary assets
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
The whole scenrio should be explained for the purpose.
Earlier (before revision of IAS 16) the treatment for exchange of assets was different and was categorized as exchange of similar and dissimilar assets. In case of dissimilar exchange of assets, the cost of new asset was its fair value. In case of similar exchange the cost of new asset was the CA of asset given up.
Now after revision of IAS 16 the scenerio is as follows
The cost of incoming asset is its fair value (incase fair value of incoming is not more clearly evident use FV of outgoing asset) if
a) the exchange transaction lacks commercial substance;OR
b) the fair value of neither the asset received nor given up is reliably measurable.
Look at the example
Asset A (CA=1000, FV=1200) is planned to be exchanged with asset B(FV =1400). The entity is required to pay 200 also.
Entry will be
Asset B______1,400
Asset A____________1,000
Cash_______________200
Gain on A__________200
Gain arose bekoz our asset has been valued at 1,200 during exchange transaction (thats y we had to pay 200 diff b/w 1400 n 1200)
In case, none of the conditions are met, then entry will be (assuming the cash figure as same)
Asset B_______1,000
Loss__________200
Asset A_____________1,000
Cash________________200
Loss arose bekoz it seems that our asset is being valued at 800 instead of 1,000 thats y we had to pay 200. It might be indication of impairment too.
If your query is still unanswered, feel free to ask.
ICAPians, the unparalleled..
<br />another question..
If an asset is acquired in exchange for another (non monetory/monetory&non monetary) asset/assets (whether similar or dissimilar in nature)16.24
The cost will be measured at the fair value (of asset received OR given up?) unless
a. the exchange transaction lacks commercial substance 16.25 or
b. the fair value of neither the asset received nor the asset given up is reliably measurable16.26
If the acquired item is not measured at fair value, its cost is measured at the carrying amount of the asset given up
cost will be measured at the fair value (of asset received OR given up?)and if its measured at F.v
of asset given up like carrying amount then what about gain/loss on disposal as which arises
in case of disposal against monetary assets
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
The whole scenrio should be explained for the purpose.
Earlier (before revision of IAS 16) the treatment for exchange of assets was different and was categorized as exchange of similar and dissimilar assets. In case of dissimilar exchange of assets, the cost of new asset was its fair value. In case of similar exchange the cost of new asset was the CA of asset given up.
Now after revision of IAS 16 the scenerio is as follows
The cost of incoming asset is its fair value (incase fair value of incoming is not more clearly evident use FV of outgoing asset) if
a) the exchange transaction lacks commercial substance;OR
b) the fair value of neither the asset received nor given up is reliably measurable.
Look at the example
Asset A (CA=1000, FV=1200) is planned to be exchanged with asset B(FV =1400). The entity is required to pay 200 also.
Entry will be
Asset B______1,400
Asset A____________1,000
Cash_______________200
Gain on A__________200
Gain arose bekoz our asset has been valued at 1,200 during exchange transaction (thats y we had to pay 200 diff b/w 1400 n 1200)
In case, none of the conditions are met, then entry will be (assuming the cash figure as same)
Asset B_______1,000
Loss__________200
Asset A_____________1,000
Cash________________200
Loss arose bekoz it seems that our asset is being valued at 800 instead of 1,000 thats y we had to pay 200. It might be indication of impairment too.
If your query is still unanswered, feel free to ask.
ICAPians, the unparalleled..
