Hyundong Co. exchanged non-monetary assets with Savior Co. No cash was exchanged and the exchange had no commercial substance. The carrying amount of the asset surrendered by Hyundong exceeded both the fair value of the asset received and Savior's carrying amount of that asset. Hyundong should recognize the difference between the carrying amount of the asset it surrendered and (    )

1. the fair value of the asset it received as a gain.
2. Savior's carrying amount of the asset it received as a gain.
3. the fair value of the asset it received as a loss.
4. Savior's carrying amount of the asset it received as a loss.

 

2. Which of the following is not true with regard to the accounting for government grants?

1. Assets may be recorded at fair value.
2. None of these answer choices are correct.
3. Companies may apply the income approach either by recording the grant as deferred revenue or as an adjustment to the asset.
4. Companies may use either the capital or income approach to account for the asset and the grant.

Answer rating: 100% (QA)

Answer Assets may be recorded at fair value Fairvalue is a broad measure of a n assets worth an... View the full answer