Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 2 - Conceptual Framework for Financial Reporting - Review and Practice - Questions - Page 62: 23


through the president's statement, right to gain, he/she simply means that the difference between the fair value and the book value should be recorded in the books of accounting as a gain a statement that I strongly disagree with.

Work Step by Step

This item should not be recorded in the books of accounts as a gain, however; since no performance obligation related to this machine has been created or rather satisfied, through its standards, GAAP can allow the company to record a gain once the machine is sold and as well delivered to the customer.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.