Basic query in accounting

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pavankumar (Querist)

09 October 2013 Which option from below is correct?

When a fixed asset is acquired in exchange for another asset and the assets are Similar then new asset may be recorded at:

Option I

Net Book Value of asset given up
Add/Less Balance receipt or payment of cash or other consideration
OR
Option II
Fair market value of asset given up or book value of asset given up, which ever is lower. ADD/LESS: Any additional payment or receipt.

I will be very much thankful to you.

CA Pallav Singhania

CA Pallav Singhania (Expert)

09 October 2013 When a fixed asset is acquired in exchange for another asset, its cost is usually determined by reference to the fair market value of the consideration given.

It may be appropriate to consider also the fair market value of the asset acquired if this is more clearly evident...

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Ganeshbabu K

Ganeshbabu K (Expert)

10 October 2013 Fixed Asset acquired is recorded at fair market value of asset givenup or fair market value of asset acquired, if this is more clearly evident
.
.
or net book value of asset given up

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