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To preclude firms from generating artificial gains on exchange transactions being recorded at fair value, U.S. GAAP requires that the transaction: must possess commercial substance.

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To preclude firms from generating artificial gains on exchange transactions being recorded at fair value, U.S. GAAP requires that the transaction: must possess commercial substance. be reviewed and approved by the SEC. have future cash flows that remain substantially the same. All of these answer choice criteria must be met to book an exchange transaction at the fair value of the exchanged assets

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