If a corporation receives assets other than cash in exchange for shares, it records the assets received at their market value as of the date of the transaction.

Question

Quizplus · Accepted Answer

This is true according to the Generally Accepted Accounting Principles (GAAP) in the United States. When a corporation issues shares in exchange for assets, the assets are recorded at their fair market value on the date of the transaction. This ensures that the shareholders' equity on the balance sheet reflects the true value of the assets held by the company.

If a Corporation Receives Assets Other Than Cash in Exchange