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what is the meaning of commercial substance in context of exchange of non monetary assets.
Ok, I’ve read the question and didn’t see the expression c”commercialsubstance” anywhere.
So I read through it again ….. and it’s still not there.
You’ll need to do better than that I’m afraid
i have kaplan kit and they have mentioned it in the solution.
ok then plz read cashflows question of dec2010. you’ll definitely find it there
Ah! In the solution! You told me it was in the question.
The fact that the exchange of assets transaction has commercial substance pushes us to treat the acquisition at fair value. I think if it were simply us exchanging an unused asset for a different unused asset, we wouldn’t then need to recognise the fair value of the asset acquired and the gain in the asset we have just given up in exchange
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