Question
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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