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Excerpt from ASC 610-20-15-5
An in substance nonfinancial asset is a financial asset (for example, a receivable) promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets.
Financial |
Nonfinancial |
Percent nonfinancial |
|
---|---|---|---|
Subsidiary A
|
$5
|
$95
|
95%
|
Subsidiary B
|
3
|
7
|
70%
|
$8
|
$102
|
93%
|
Financial |
Nonfinancial |
Percent nonfinancial |
|
---|---|---|---|
Subsidiary C
|
$5
|
$95
|
95%
|
Subsidiary D
|
30
|
70
|
70%
|
$35
|
$165
|
83%
|
Financial |
Nonfinancial |
Percent nonfinancial |
|
---|---|---|---|
Individual assets
|
$8
|
$92
|
92%
|
Subsidiary C
|
5
|
95
|
95%
|
Subsidiary D
|
30
|
70
|
70%
|
$43
|
$257
|
86%
|
Type of transactions |
Accounting literature |
Reference for more information |
---|---|---|
Sale of nonfinancial assets* that meet the definition of a business to a noncustomer
|
||
Sale of a legal entity that owns substantially all nonfinancial assets * or that is otherwise in the scope of ASC 610-20
|
||
Contribution of nonfinancial assets* to an entity in exchange for an equity method investment in that entity
|
||
Contribution of nonfinancial assets* to an entity in exchange for an equity interest in that entity accounted for under ASC 321
|
||
Contribution of nonfinancial assets* to a joint venture in exchange for an interest in that joint venture
|
||
Other transactions
|
||
Sale of a legal entity that does not own substantially all nonfinancial assets* and that is not otherwise in the scope of ASC 610-20
|
||
Distribution of nonfinancial assets that constitute a business to owners in a spinoff transaction
|
||
Carrying value |
Fair value |
|
---|---|---|
Office building
|
$1,100
|
$1,350
|
Equity method investments
|
1,000
|
1,150
|
$2,100
|
$2,500
|
An entity shall account for a contract with a customer that is within the scope of this Topic only when all of the following criteria are met:
Dr. Cash
|
$500,000
|
|
Cr. Contract liability
|
$500,000
|
Dr. Note receivable
|
$4,500,000
|
|
Dr. Contract liability
|
$500,000
|
|
Cr. Manufacturing facility
|
$1,200,000*
|
|
Cr. Gain on sale
|
$3,800,000*
|
If a performance obligation is not satisfied over time in accordance with paragraphs 606-10-25-27 through 25-29, an entity satisfies the performance obligation at a point in time. To determine the point in time at which a customer obtains control of a promised asset and the entity satisfies a performance obligation, the entity shall consider the guidance on control in paragraphs 606-10-25-23 through 25-26. In addition, an entity shall consider indicators of the transfer of control, which include, but are not limited to, the following:
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