Quiz 10.31 – T/F GAAP’s Use of Fair Value in Nonmonetary Exchanges
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
All nonmonetary exchanges’ components are measured using fair value under current GAAP.
All nonmonetary exchanges’ components are measured using fair value under current GAAP.
The gain or loss on a nonmonetary exchange of assets is the book value of the asset given up subtracted from its fair value.
A gain is recognized in a typical nonmonetary exchange of assets if the fair value of the asset given is less than its book value.
The asset received in a nonmonetary exchange is valued at the book value of the asset given, when it is not possible to determine the fair values of the assets involved.
If the assets being exchanged have varying expected service lives, it signifies a lack of commercial substance in the nonmonetary asset exchange.
No loss can be recorded if a nonmonetary asset exchange lacks commercial substance.
Assets eligible for interest capitalization during construction comprise (a) assets constructed for internal use, and (b) assets constructed as separate projects for sale or lease.
Interest costs related to a self-constructed asset can be capitalized until the asset is ready for use or when interest costs are no longer incurred.
Interest on borrowed amounts incurred since loan inception, regardless of construction expenditure timing, is included in the amount of interest to capitalize for self-constructed assets.
Identifiable expenditures that bring the asset to its desired condition and location for use are included in the initial cost of property, plant, and equipment. True or false?