Case 17: Horizons Inc. has agreed to sell an investment in a subsidiary that has been accounted for on the equity method of accounting to a minority stockholder in exchange for the stockholders share in Horizons. Since the fair value of the investment exceeds its book value, Horizons CEO is considering recognizing a gain on the exchange. However, the new CFO at Horizons is recommending to the board of directors that the excess from the exchange be accounted as a credit to equity. Horizons turns to you for advice!

1. Read case 17, "Gain on a nonmonetary exchange" in the "Intermediate Accounting" section of the Cases in the Resources. This case deals with gain on a nonmonetary exchange and the roles of the SEC, FASB, and GASB in setting accounting standards.
2. Identify different types of authoritative pronouncements and the levels of U.S. GAAP. Use the Accounting Standards Codification and other relevant databases to locate U.S. GAAP authorities to make recommendations for how to report gains on exchanges. The resources listed in the first study of Unit 1 may be of use to you in completing this assignment.
3. Submit a brief report on case 17 in a Word document. Cite appropriate accounting standards to support your answers to the case scenario.

Submission Requirements

• Written communication: Written communication is free of errors that detract from the overall message.
• APA formatting: Resources and citations are formatted according to APA (current edition) style and formatting.
• Length: 34 double-spaced, typed pages, including cover and reference pages.
• Font and font size: Times New Roman, 12 point.