When an intangible asset is acquired by an exchange of assets, which of the following measures will need to be considered in the determination of cost?
A) The initial cost of the asset given up.
B) The fair value of the asset given up.
C) The replacement value of the asset received.
D) The carrying amount of the asset received.

Question

Quizplus · Accepted Answer

When an intangible asset is acquired by an exchange of assets, the cost will be determined by the fair value of the asset given up. The fair value represents the economic resources given up or relinquished in exchange for the intangible asset received. The initial cost, replacement value, and carrying amount of the asset received are not relevant in determining the cost of the intangible asset acquired.

When an Intangible Asset Is Acquired by an Exchange of Assets