To prevent abuses when accounting for nonmonetary asset exchanges,U.S.GAAP requires companies to record certain exchanges of nonmonetary assets at the existing book value of the relinquished assets.

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This statement is true. U.S.GAAP requires companies to record certain exchanges of nonmonetary assets at the existing book value of the relinquished assets in order to prevent abuses when accounting for such exchanges. This is known as the "cost principle" and is applied to ensure that companies record the exchange at its historical cost rather than at its current market value or some other valuation.

To Prevent Abuses When Accounting for Nonmonetary Asset Exchanges,U