When plant assets are exchanged,the gain or loss on the exchange equals:

Question

Quizplus · Accepted Answer

When plant assets are exchanged, the gain or loss on the exchange equals the difference between the fair value and the book value of the asset given up. This is because the gain or loss is recognized based on the difference between the carrying amount (book value) of the asset given up and the fair value of the asset received. The fair value of the asset received does not affect the gain or loss calculation, only the fair value of the asset given up.

When Plant Assets Are Exchanged,the Gain or Loss on the Exchange