CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

True or False?

The financial reporting of gains and losses on exchanges of plant assets is different than the income tax reporting of gains and losses on exchanges of plant assets.
Correct Answer: True

For financial reporting purposes, gains and losses are recognized on disposals and trade-ins. For income tax reporting purposes, gains or losses on exchanges of plant assets are not recognized but are used to adjust the recorded value of the new asset.

User Contributed Comments 2

User Comment
foshanboy how about if the assets are dissimilar assets,which enable the loss or gain to be recognized either in financial reporting or tax reporting
johntan1979 That's beyond the requirements of CFA Level I
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