Example 1: Our firm has an old asset with NBV of $10,000 (80,000-70,000) and FMV of $4,000. We will exchange it for a new asset which has a list price of $100,000; we will also have to pay cash of $75,000. This exchange may or may not have commercial substance. 1. g/l on old (BV VS FMV): 10,000- 4,000=6,000 Loss 2. Recognize : Gain or loss? Commercial substance? Cash received