GAAP Requires That All Exchange Transactions Be Recorded at the Fair

question 85

True/False

GAAP requires that all exchange transactions be recorded at the fair value of the exchanged assets.Thus,except in the rare case that the book value and the fair value of exchanged assets are identical,gains (or losses)on exchanges should be expected.

---

Definitions:

Interim Income Statements

Financial statements reporting a corporation's financial performance for a period shorter than a fiscal year, often quarterly.

Expenses

Costs incurred in the process of earning revenue, including operational costs, salaries, and utilities, among others.

PCAOB

Stands for the Public Company Accounting Oversight Board, which is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.

Audit Report

An official opinion issued by an auditor based on an examination of a company's financial statements, expressing the auditor's view on whether the financial statements give a true and fair view of the company's financial performance and position.