The Cost of a Nonmonetary Asset Acquired in Exchange for Another

question 22

Multiple Choice

The cost of a nonmonetary asset acquired in exchange for another nonmonetary asset when the exchange has commercial substance is usually recorded at

• A) the fair value of the asset given up, and a gain or loss is recognized.
• B) the fair value of the asset given up, and a gain but not a loss may be recognized.
• C) the fair value of the asset received if it is equally reliable as the fair value of the asset given up.
• D) either the fair value of the asset given up or the asset received, whichever one results in the largest gain (smallest loss) to the company.