When accounting for asset exchanges,
A) if a transaction lacks commercial substance, it is not recorded.
B) an asset cannot be recognized at more than its fair value.
C) if the fair values of either the asset given up or the asset received cannot be ascertained, then the Board of Directors may assign an arbitrary value.
D) when an exchange lacks commercial substance, either a gain or loss may be recognized.

Question

Quizplus · Accepted Answer

An asset cannot be recognized at more than its fair value, ensuring that the recorded value reflects the true economic value of the asset.

When Accounting for Asset Exchanges