[sarita]

Could anyone explain how to determine whether or not a nonmonetary transaction has commercial substance?

Thanks!!!

FAR 7/3/13 - 82
BEC 8/21/13 - 82
AUD 10/2/13 - 92
REG 12/3/13 - 88

DONE!!!! CA Candidate
Beat the 12/31/13 clock!

[J]

It has commercial substance if the future cash flows of the entities involved change as a result of the transaction. Generally, most of these transactions involve something like trading a truck for a truck, which almost always lack commercial substance because they really have nothing to do with changing cash flows of the entity.

However, if you were to theoretically exchange old equipment for new equipment and the old equipment had an annual cash inflow of $150,000 and the new equipment is projected to have an annual cash inflow of $200,000, this would be an example of a nonmonetary exchange with commercial substance.

[MustPass1988]

Rogers said that the test will specifically state that either the cash flows were not expected to substantially change (lacks commercial substance) or that cash flows are expected to/did substantially change (has commercial substance).

AUD: PASSED [81]; Expired, retaking August 23rd
BEC: PASSED [83]; Expired, retaking July 11th
REG: PASSED [83]
FAR: FAILED [64]; Retaking May 23rd

[evesocal]

>>Rogers said that the test will specifically state that either the cash flows were not expected to substantially change (lacks commercial substance) or that cash flows are expected to/did substantially change (has commercial substance).<<

I think this is true, the exam states it. But you should know the concept.

BEC: 75

REG: 80

AUD: 77

FAR: 81

stupid ethics exam: 84, 92 and doneeeeee!

Licensed in California!

B: 75
R: 80
A: 77
F: 81
Ethics: 84, 92 and done!
Licensed in California

[MustPass1988]

Eh, I study to pass the exam, not to understand every concept 🙂

AUD: PASSED [81]; Expired, retaking August 23rd
BEC: PASSED [83]; Expired, retaking July 11th
REG: PASSED [83]
FAR: FAILED [64]; Retaking May 23rd

[sarita]

Wow, thank you.. good to know!!!

FAR 7/3/13 - 82
BEC 8/21/13 - 82
AUD 10/2/13 - 92
REG 12/3/13 - 88

DONE!!!! CA Candidate
Beat the 12/31/13 clock!

[jeff]

I cover this within the first few minutes

AUD - 79
BEC - 80
FAR - 76
REG - 92

Jeff Elliott, CPA (KS)
NINJA CPA | NINJA CMA | NINJA CPE | Another71

[kpb]

Thanks Jeff for posting this video, it helped me gain a better understanding of this very hard (for me) to understand topic. Even though this was like a year ago, I appreciate it.

BEC - 81 4/08/14
FAR - 80 8/25/14 Thank you Jesus!
REG - 69 (Nov 14),80 1/08/15 Thank God!
AUD - 70 (May 14), xx 5/1/15

Becker Online & Becker Flashcards
I definitely wish I was one of those people who got all 4 exams done in 4 months, but unfortunately LIFE (being a newlywed, stress, adjusting to newlywed life and cpa exam study life, as well as starting a job with a Big4 which I am very happy about) got in the way, just happy that I am passing period!!

I can do all things through Christ who strengthens me!

[Author]

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