Firms sometimes acquire assets by exchanging an asset other than cash or by issuing common stock.In these cases, acquisition cost is either the fair value of the consideration given or the fair value of the asset received, depending on which value the firms can more reliably measure.

Question

Quizplus · Accepted Answer

This statement is true. Firms can determine the acquisition cost of assets acquired through non-cash exchanges or issuance of common stock by using either the fair value of the asset received or the fair value of the consideration given, depending on which value is more reliably measurable.

Firms Sometimes Acquire Assets by Exchanging an Asset Other Than