When exchanging an asset for an asset (ex. exchanging land for plant), how do you know whether to measure it at the FV of the asset received or the FV of the asset given up please?
We need to measure at fair value of asset given – in order to arrive at fair position of profit or loss on the exchange.
When you have the new asset in your records, you may need to think again about its value and potentially you will need to impair it….or revalue it
I don’t think there is any strict rule about it but if you don’t use fair value of asset given up, you will be distorting the financial statements with reference to profit / loss on disposal
ok thank you
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