A gain or loss is recorded for exchanges of plant assets with commercial substance.

Question

Quizplus · Accepted Answer

When plant assets are exchanged with commercial substance, a gain or loss is recognized and recorded. This is because the transaction has resulted in a change in the company's assets and potentially its financial position. The amount of the gain or loss is determined by comparing the fair value of the asset given up with the fair value of the asset received.

A Gain or Loss Is Recorded for Exchanges of Plant