Accounting recognition should be given to the gain realized on a non-monetary exchange of plant assets except when the exchange has

Question

Quizplus · Accepted Answer

When a non-monetary exchange of plant assets has no commercial substance and additional cash is paid, recognition of a gain is not appropriate as the transaction does not result in an increase in the company's resources. In other words, the company is not better off after the transaction. Therefore, the gain should not be recognized. The other options (B, C, and D) all involve commercial substance which could result in a gain recognition.

Accounting Recognition Should Be Given to the Gain Realized on a Non-Monetary