Ramesh Ltd (RL) has a machine with carrying amount 4,50,000 and Kapil Ltd (KL) has a machine
Question:
Ramesh Ltd (RL) has a machine with carrying amount ₹4,50,000 and Kapil Ltd (KL) has a machine with carrying amount ₹4,35,000. Both the companies decide to exchange these machines for the mutual benefit. The active market value of the machines is ₹4,95,000 and ₹ 4,78,000, respectively. Show how these are to be recognized in the books of these companies when
(i) There is commercial substance
(ii) There is no commercial substance from the exchange transaction.
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i The accounting standards provide that in case of exchange tran...View the full answer
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