The old assets hand Conversely if the net book value of the assets surrender is lower than the market value of the assets to be receiv then this is consider a gain from the exchange. This gain cannot be record as income and cannot be present in the income statement. Instead the profit should be ruc from the market value of the new asset receiv. Also read Example of an inventory correction journal and how to make it Banner klo How to Account for Fix Asset Exchange.
As mention above The old assets hand
Fix asset exchange can result in El Salvador WhatsApp Number List profits or losses. Journal entries for gains or losses on exchange of fix assets are different. For fix asset exchange losses the company records the new assets receiv at their market value and derecognizes the old assets hand over at both their acquisition cost and accumulat depreciation. The following is the journal entry for the fix asset exchange loss Account Debit crit Fix assets new XXX Fix asset exchange losses XXX Accumulat depreciation old XXX Fix assets old XXX What XXX To record the exchange of new assets and cash for new assets.
On the other hand if
There is a profit on the exchange Thailand Phone Number List of assets the profit cannot be present in the income statement. The company records the new assets receiv at their market value less the gain from the exchange or at the amount of cash paid for the new assets plus the net book value of over and then derecognizes the old assets hand over from the Balance Sheet. The following are the journal entries for the gain from the exchange of fix assets Account Debit Crit Fix assets new equals cash paid plus NBV of old assets XXX Accumulat depreciation old XXX Fix assets new XXX What XXX To record the exchange of new.