A company is exchanging its common stock for land in a nonmonetary exchange. This transaction should be valued based upon the
A) fair value of the stock.
B) book value of the land.
C) fair value of the stock issued and the land received.
D) fair value of the stock issued and the land received, whichever is more reliable.

Question

Quizplus · Accepted Answer

The transaction should be valued based on the fair value of the stock issued and the land received, whichever is more clearly evident and reliable. This approach ensures that the exchange is recorded at a value that most accurately reflects the current market conditions and the true worth of the assets exchanged.

A Company Is Exchanging Its Common Stock for Land in a Nonmonetary