13. Companies account for the exchange of nonmonetary assets on the basis of the fair value of the asset given up or the fair value of the asset received.
14. If a nonmonetary exchange lacks commercial substance, and cash is received, a partial gain or loss is recognized.
15. When a company exchanges nonmonetary assets and a loss results, the company recognizes the loss only if the exchange has commercial substance.
16. Costs incurred subsequent to the acquisition of an asset are capitalized if they provide future benefits.
17. Improvements are often referred to as betterments and involve the substitution of a better asset for the one currently used.
18. When an ordinary repair occurs, several periods will usually benefit.
19. Companies always treat gains or losses from an involuntary conversion as extraordinary items.
20. If a company scraps an asset without any cash recovery, it recognizes a loss equal to the asset’ s book value.