Perspective and Issues
Definitions of Terms
Concepts, Rules, and Examples
Types of nonmonetary transactions
Exceptions to the General Rule
Modification of the basic principle
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
Deferred Income Taxes
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.
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