CPA 2022 – Accounting 20 (BT Workbook)

Chapter 20 Exchange of Non-Monetary Assets

1. Objective questions

5. "2020 · Multiple Choice · Question Code 145772"

Among the transactions or events that occur in Company A, the non-monetary asset exchange standard is not applicable to the accounting treatment (ACD).

A. Company A increased the capital of its joint venture at the price of patent rights

B. Company A rents out the premises in exchange for the investment of the joint venture held by Company B

C. Company A exchanged its 5-year debt investment for Company C's know-how

D. Company A distributes profits to shareholders with production equipment

[Answer] ACD

[Analysis](1) Exchange of non-monetary assets. In addition, although the following transactions meet the definition of non-monetary asset exchange, they are not applicable to the non-monetary asset exchange standard because they are already regulated by other standards:

a. For the exchange of non-monetary assets for the exchange of inventory, the income criterion is applicable to the transferor.

b. For the exchange of non-monetary assets involving business combinations, the standards for business combinations, long-term equity investments, and consolidated statements shall apply.

c. For the exchange of non-monetary assets involving financial assets, the Financial Instruments Guidelines (option C) apply.

d. For the exchange of non-monetary assets involving right-of-use assets or lease receivables, the lease guidelines apply.

e. The exchange of non-monetary assets constituting an equity transaction, i.e., one party holds shares in the other party and conducts the transaction as a shareholder, or both parties have the same ultimate controlling party, which is subject to the principle of equity transaction (option A).

(2) In option B, the exchange of fixed assets for long-term equity investment held by other enterprises (joint ventures, not involving business combinations) constitutes a non-monetary asset exchange and is applicable to the standard.

(3) Option D, Company A's distribution of profits to shareholders with production equipment does not constitute an exchange of non-monetary assets.

7. "2018 · Multiple Choice · Question Code 145774"

Among the following assets, (AD) is a monetary asset.

A. Bank Deposits

B. Advance Payment

C. Financial assets at fair value through profit or loss

D. Notes receivable

[Answer] AD

[Analysis](1) Monetary assets refer to the monetary funds held by enterprises and the right to receive fixed or determinable amounts of monetary funds, including cash, bank deposits, accounts receivable and notes receivable.

(2) Option AD is correct, bank deposits and notes receivable are monetary assets.

(3) Option B is incorrect, the prepaid account will receive goods or services, not monetary assets.

Option C is incorrect,.

8. "2017 · Multiple Choice Question · Question Code 145775"

Company A is a film and television video platform provider. In 2016, Company A exchanged the copyright of a film it owned with the copyright of a TV drama work of Company B. The book value of the swapped copyright in Company A was $8 million, and the book value of the swapped copyright in Company B was $5.5 million. There is no receipt or payment of monetary funds involved in the transaction. Regardless of other factors, the following accounting judgments of Company A on the transaction are in accordance with the provisions of accounting standards (ABCD).

A. The transaction is an exchange of non-monetary assets and should be accounted for in accordance with the principles of exchange of non-monetary assets

B. Since the copyright of the swapped film is within the period of use and has no market transaction value for reference, when determining its fair value, the external copyright licensing income of similar works may be referred to and appropriately adjusted

C. If the fair value of the swapped in and swapped assets cannot be reliably determined, the recorded value of the swapped assets shall be based on the carrying amount of the swapped assets and taking into account the relevant taxes and fees

D. The transaction has commercial substance due to the difference in the expected cash flow brought by the asset content, production method, cast team, and applicable population are not the same

[Answer] ABCD

[Analysis](1) Option A is correct, copyright (intangible assets) is a non-monetary asset, and the transaction does not involve monetary assets, so it is a non-monetary asset exchange.

(2) Option B is correct, and if the enterprise applies the market method to estimate the fair value of the relevant assets, it can use the market price of the same or similar assets to make adjustments.

(3) Option C is correct,; The boot received or paid serves as an adjustment factor in determining the cost of the asset to be swapped in.

Option D is correct, and the exchange of non-monetary assets that occurs in an enterprise is deemed to have commercial substance if one of the following conditions is met:

a. the future cash flows of the swapped-in asset differ materially from the surrendered asset in terms of risk, time distribution or amount;

b. The present value of the projected future cash flows resulting from the use of the swapped assets is different from the present value of the projected future cash flows resulting from the continued use of the swapped assets, and the difference is material as compared to the fair value of the swapped assets and the surrendered assets.

In this question, because the content of the assets exchanged in and out, the production methods, the cast team, and the applicable population are not the same, there are differences in the expected cash flow brought by them, and they should be regarded as having commercial substance.

3. "Multiple Choice. Question code: 145770"

Company A exchanged two large transport vehicles with one of Company A's production equipment, and paid a premium of RMB 100,000. The original book price of the two transport vehicles of Company A was 1.4 million yuan, the accumulated depreciation was 250,000 yuan, and the fair value was 1.3 million yuan; The original book price of Company A's production equipment was 3 million yuan, the accumulated depreciation was 1.75 million yuan, and the fair value was 1.4 million yuan. The exchange of non-monetary assets has commercial substance. Assuming that the relevant taxes and fees are not considered, the profit or loss that should be recognized by Company A for the exchange of non-monetary assets is (D) million yuan.

A.0

B.5

C.10

D.15=130-(140-25)

[Answer] D

In this question, the exchange of non-monetary assets has commercial substance and the fair value of the exchanged assets and the surrendered assets can be reliably measured, so it should be measured on the basis of fair value, so the profit or loss should be recognized = 130 - (140 - 25) = 15 (10,000 yuan). Therefore, option D is correct.

4. "Multiple choice · question code 145771"

On May 1, 2020, Company A exchanged a self-used office building for Company B's 20% equity interest in Company C. The fair value of the office building exchanged by Company A was 5.1 million yuan, and the book value was 4 million yuan (of which the original book value was 6 million yuan and depreciation was 2 million yuan); The carrying value and fair value of the equity exchanged by Company B was RMB 3.5 million and the fair value was RMB 4.8 million, and Company B paid a premium of RMB 300,000 to Company A. Company A accounts for the equity acquired as a long-term equity investment, which has a significant impact on Company C. On the date of exchange, the fair value of Company C's identifiable net assets was $25 million. On the day of the exchange, the two parties completed the procedures for the transfer of ownership of the relevant assets. The exchange has commercial substance. Regardless of other factors such as VAT, the recorded value of the assets exchanged by Company A is (B) million yuan.

A.480

B.500 = 510 (fair value of assets surrendered) - 30 (boot received) + (500-480) The recorded value of equity investment in the growth period should be adjusted

C.510

D.400

[Answer] B

[Analysis] in this question. The initial cost of Company A's long-term equity investment = 510 (fair value of assets surrendered) - 30 (boot received) = 480 (10,000 yuan). Since the initial cost is less than the share of the fair value of Company C's identifiable net assets of 5 million yuan (2500×20%), the recorded value of equity investment in the growth period should be adjusted to 200,000 yuan (500-480), and the non-operating income should be recognized accordingly. Therefore, the recorded value of the assets exchanged by company A = 480 + 20 = 500 (10,000 yuan).

5. "2013 · Multiple Choice · Question Code 145777"

Company A entered into an asset replacement contract with Company C, whereby Company A took its 30% equity interest in the joint venture as consideration and paid a premium of RMB 1 million with bank deposits in exchange for a large piece of equipment produced by Company C, the total price of which was RMB 39 million, and the cost of acquiring the 30% equity interest in the joint venture was RMB 22 million. At the time of acquisition, the fair value of the associate's identifiable net assets was $75 million (the fair value of the identifiable assets and liabilities was equal to the carrying amount). When Company A replaced the large-scale equipment after acquiring the equity, the joint venture achieved a cumulative net profit of 35 million yuan, distributed cash dividends of 4 million yuan, and increased other comprehensive income that could reclassify net profit and loss by 6.5 million yuan. On the date of the exchange, the fair value of Company A's 30% equity interest in the associate was $38 million, assuming that the exchange had commercial substance, regardless of taxes and other factors, the following accounting treatment of the above transaction was correct (ABCD).

A. Company A disposed of the equity of the joint venture and recognized an investment income of 6.2 million yuan

B. Company C confirmed that the recorded value of the equity exchanged for the equity of the associated enterprise was 38 million yuan

C. Company C confirmed that the revenue from the exchange of large-scale special equipment was $39 million

D. Company A confirmed that the recorded value of the large-scale special equipment was $39 million

[Answer] ABCD

The transaction is a non-monetary asset exchange (the exchange object is a non-monetary asset + boot ratio <25%), and meets the conditions for measurement at fair value (with commercial substance + the fair value of the asset can be reliably measured).

Company A swapped out its long-term equity investment (equity method) and bought machinery and equipment, and paid a premium of RMB 1 million.

（1），。

(2) The book value of long-term equity investment = 2200 + (7 500×30% -2 200) + (3 500-400) ×30% + 650×30% = 3375 (10,000 yuan), the fair value is 38 million yuan, and the amount of investment income that should be recognized = 3 800-3 375 + 650×30% = 620 (10,000 yuan).

The recorded value of the equipment exchanged = the fair value of the assets surrendered + the fair value of the premium paid = 3800 + 100 = 3900 (10,000 yuan).

Therefore, option A is correct and option D is correct.

(3) Option B is correct, the recorded value of the equity investment of the joint venture = the fair value of the equipment surrendered - the fair value of the premium received = 3 900-100 = 3800 (10,000 yuan).

(4) Option C is correct, and the equipment produced by Company C should be deemed to be sold, and the revenue of 39 million yuan should be recognized.