A firm may retire an asset from service by trading it in on a new asset.U.S.GAAP and IFRS require that firms record trade-in transactions at _____ unless they lack commercial substance.
A)present value of future cash flows
B)replacement value
C)liquidation value
D)fair value
E)undiscounted cash flows

Question

Quizplus · Accepted Answer

Both U.S.GAAP and IFRS require that firms record trade-in transactions at fair value unless they lack commercial substance. Fair value is the amount at which the asset could be exchanged in a transaction between knowledgeable, willing parties in an arm's length transaction.

A Firm May Retire an Asset from Service by Trading