Wiley GAAP 2013: Interpretation and Application of Generally Accepted Accounting Principles

CHAPTER 23

NONMONETARY TRANSACTIONS

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Nonmonetary Transactions

Scope

Types of nonmonetary transactions

General rule

Exceptions to the General Rule

Nonreciprocal Transfers

Nonmonetary Exchanges

Modification of the basic principle

Commercial substance

Recognition of gains or losses

Nonmonetary exchanges that include monetary consideration (boot)

Exchanges of real estate involving monetary consideration (boot)

Exchange of product or property held for sale for productive assets

Exchanges involving assets that constitute a business

Barter transactions

Involuntary Conversions

Deferred Income Taxes

Summary

Disclosure

PERSPECTIVE AND ISSUES

Accounting Standards Codification (ASC) 845, Nonmonetary Transactions, addresses those transactions in which no money changes hands. These transactions are most commonly associated with exchanges of fixed assets, but can also involve other items, such as inventory, liabilities, and ownership interests. They can also involve one-way, or nonreciprocal, transfers.

This chapter sets forth the basic structure and concepts of nonmonetary transactions, including the concept of commercial substance, rules regarding similar and dissimilar exchanges, involuntary conversions, and how to handle exchanges that include a certain amount of monetary consideration.

Major Topics and Subtopics in the Financial Accounting Standards Board (FASB) Accounting Standards Codification

820	Fair Value Measurements ...