When a barter transaction has no commercial substance, a gain or loss must always be recognized on the income statement as a result of the exchange.

Question

Quizplus · Accepted Answer

In accounting, when a barter transaction has no commercial substance, gains or losses are generally not recognized immediately in the income statement. Instead, recognition depends on whether the transaction results in a change in future cash flows.

When a Barter Transaction Has No Commercial Substance, a Gain