Non-monetary transactions lacking commercial substance can never result in a gain or loss being recorded.

Question

Quizplus · Accepted Answer

Non-monetary transactions lacking commercial substance can still result in a gain or loss being recorded, but the gain or loss is usually deferred and recognized over time. Commercial substance refers to a change in the cash flows of the parties involved in the transaction, and is often considered necessary for a transaction to have real economic consequences.

Non-Monetary Transactions Lacking Commercial Substance Can Never Result in a Gain