Example 1: Our firm has an old asset with Nov or $10.000 (80,000- 10.000) and YMV 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 2. Recognize: Gain or loss? LOS 6,000 Commercial substance? Cash received Example 2: Our firm has an old asset with NBV of $10,000 (80,000- 70,000) and MV of $18,000. 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 transaction has commercial substance. 1.911 on old (BV VS FMV): 10,000+ 18,000 -28,000 2. Recognize: Gain or loss Gain Commercial substance? Cash received? ample Our firm has an old asset with NAV of $10,000 (80,000- 70,000) and EMV of $18,000. We will exchange it for a new asset which has a list price of $100,000: we will also have to pay cash of 575.000. This transaction does NOT have commercial bance. 1.9/1 on oldt 18,000-10, 000-8,000 2. Recognize Gain or loss? Doss Comercial substance? Cash received Focus MacBook Air $ A % 5 6 & 7 8 9 0 Example 1: Our firm has an old asset with Nov or $10.000 (80,000- 10.000) and YMV 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 2. Recognize: Gain or loss? LOS 6,000 Commercial substance? Cash received Example 2: Our firm has an old asset with NBV of $10,000 (80,000- 70,000) and MV of $18,000. 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 transaction has commercial substance. 1.911 on old (BV VS FMV): 10,000+ 18,000 -28,000 2. Recognize: Gain or loss Gain Commercial substance? Cash received? ample Our firm has an old asset with NAV of $10,000 (80,000- 70,000) and EMV of $18,000. We will exchange it for a new asset which has a list price of $100,000: we will also have to pay cash of 575.000. This transaction does NOT have commercial bance. 1.9/1 on oldt 18,000-10, 000-8,000 2. Recognize Gain or loss? Doss Comercial substance? Cash received Focus MacBook Air $ A % 5 6 & 7 8 9 0