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In some cases, exchanges of nonmonetary assets that would otherwise be based on recorded amounts may include an amount of monetary consideration referred to as "boot." ASC 845-10-30-6 through 30-7 and ASC 845-10-25-6 set forth the accounting treatment required for part-monetary, part-nonmonetary transactions. A transaction should be considered monetary (rather than nonmonetary) if the boot received is significant, which is defined as at least 25% of the fair value of the exchange. The transaction should be accounted for entirely at fair value unless there are uncertainties in determining fair value (see ASC 845-10-30-3). The guidance in ASC 845-10-25-6 was not meant to eliminate the need to exercise judgment in those circumstances in which the substance of the transaction indicates that fair value accounting may not be appropriate.
The receipt of boot generally leads to recognition of a gain. On the other hand, boot paid gives rise to an increase in assets of the payer.
Real estate
An exchange of real estate may not be considered entirely monetary even if boot is 25% or more of the fair value exchanged. If the exchange qualifies for fair value measurement under ASC 845, the recipient of 25% or more boot will compute gain based on the full fair value of the exchange (as would be true were it not an exchange of real estate). The recipient of boot will apply the guidance in ASC 360-20 or ASC 970-605 for recognition of gain.
However, if the exchange does not qualify for fair value measurement, the transaction should be treated as partly monetary and partly nonmonetary. Under ASC 845-10-15, the recipient of 25% or more boot in a real estate exchange that meets the criteria at ASC 845-10-30-3 for measurement at carrying value must (1) allocate the fair value of the exchange between the monetary and nonmonetary components and (2) account for the monetary portion of the transaction under ASC 360. If the criteria of ASC 360-20-40-5 are not met, no gain recognition would be allowed for the monetary portion. For the recipient of boot, the monetary portion would be accounted for under ASC 360-20 and ASC 970-605 as the equivalent of a sale of an interest in the underlying real estate, and the nonmonetary portion would be accounted for at carrying value. For the payer of boot, the monetary portion would be accounted for as an acquisition of real estate, and the nonmonetary portion would be accounted for at carryover basis. The example in ASC 845-10-55-29 through ASC 845-10-55-37 illustrates the application of this guidance.

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