In an exchange of assets, the new asset is recorded at
A) the fair value of the asset given up.
B) the fair value of the new asset.
C) the carrying amount of the asset given up plus any cash paid (or less any cash received).
D) the fair value of the asset given up plus any cash paid (or less any cash received).

Question

Quizplus · Accepted Answer

The correct approach to recording the acquisition of a new asset in an exchange is to use the fair value of the asset given up plus any cash paid or less any cash received. This method ensures that the new asset is recorded at its current market value, reflecting the true cost of the acquisition.

In an Exchange of Assets, the New Asset Is Recorded