- This topic has 5 replies, 2 voices, and was last updated 10 years ago by
MikeLittle.
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silentassassinor
- Topics: 16
- Replies: 21
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what is the meaning of commercial substance in context of exchange of non monetary assets.
MikeLittle
- Topics: 26
- Replies: 22604
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give me a reference where I can find the context, please
silentassassinor
- Topics: 16
- Replies: 21
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please check consolidation question GLOVE june 2007
MikeLittle
- Topics: 26
- Replies: 22604
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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
silentassassinor
- Topics: 16
- Replies: 21
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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
MikeLittle
- Topics: 26
- Replies: 22604
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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
silentassassinor
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