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EQUIPMENT WITHOUT COMMERCIAL VALUE  Form

EQUIPMENT WITHOUT COMMERCIAL VALUE Form

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in this video I'm going to talk about how to account for an exchange of non-monetary assets when the transaction lacks commercial substance or when you can't determine the fair value of the non-monetary assets so if you remember from previous videos our general rule of thumb was that we're gonna record the asset received a fair market value and then book again or a loss but if we don't know what the fair market value is then obviously we can't use the fair market value to do this and so we're gonna do an alternative method where we're actually going to bring the new asset in at the book value of the old asset adjusting for any cash so also we do the same method if there's no commercial substance to the transaction and commercial substances is kind of a tricky issue the main idea is that by doing this transaction there should be some change in the underlying cash flows for the firm so if the firm decides to trade one truck for a truck from another company it's it's assumed that okay if

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