Exchang for a similar We can calculate the profit from the exchange as follows Information Mark Mark Market value of new equipment receiv . Net book value of assets surrender Equipment WhatProfit from exchang In accordance with accounting rules in accordance with the principle of conservatism gains from the exchange of assets should not be record as income and present in the income statement. Instead the value of the new asset should be record at the amount of cash paid for the exchange plus the net book value of the old asset surrender.
Therefore we can Exchang for a similar
Record the journal entry for the gain Georgia WhatsApp Number List on e xchange of fix assets as follows Account Debit Crit Equipment new . Accumulat depreciation Equipment old . Equipment old . What To record exchange of new equipment and cash for new equipment Most exchanges have commercial substance. However if a transaction does not have commercial substance it becomes more complicat. The accounting treatment will depend on the circumstances.
The simplest condition
Is when two assets are trad without Spain Phone Number List cash payments from either party. In this case the new asset is record at the carrying value of the old asset cost less accumulat depreciation. Pay attention to the following conditions If cash is provid together with old assets the new assets are also record at the carrying value of the old assets plus the amount of money paid. If cash is receiv and the cash is less than of the total consideration receiv some or all of the realiz gain is recogniz. For example assume a machine with a fair value of and accumulat depreciation of is machine and in cash. When you list a new machine for you will also make a profit.