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Slide 31 Deferral of Gains for Exchanges without Commercial Substance - circumstances in which gains on exchanges are not recorded. Slide 33 to 51 -

Slide 31 Deferral of Gains for Exchanges without Commercial Substance - circumstances in which gains on exchanges are not recorded.

Slide 33 to 51 - Self Constructed Assets - Skip

Slide 52 Expenditures Subsequent to Acquisition

Slide 53 Capital Expenditures

Slide 54 Operating Expenditures

Slide 55 - Additions

Slide 55 Additions- enlarge existing asset by adding new component

Slide 56 Improvements: Substitution of a better asset than one used; Replacements: substitution of an equivalent asset.

Slide 57 Method 1 Substitution Method substitute new asset for old asset

Example Pippa Company decides to replace its old oil furnace with a new gas furnace. The oil furnace has a historical cost of $50,000 with accumulated depreciation of $30,000. The scrap value of the old furnace is $5,000, and the new furnace costs $70,000. Pippa records this transaction as follows:

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