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Discussion Forum Index --> Accounting Questions --> Booking trade-in value when leasing
Frankxk (talk|edits) said:
| 1 April 2008
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| My company procures a new x-ray machine which costs $30k. We trade in the old machine (fully depreciated) for $10k and set up a lease for the remaining $20k. How do I book the $10,000 trade-in value?
frankxk
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MIKEB (talk|edits) said:
| 12 April 2008
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| It is a like-kind exchange and the $10K gain from the old machine is rolled into the basis of the new machine. The basis of the new machine is $20K.
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MIKEB (talk|edits) said:
| 12 April 2008
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| It is a like-kind exchange and the $10K gain from the old machine is rolled into the basis of the new machine. The basis of the new machine is $20K.
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BEGooding (talk|edits) said:
| April 12, 2008
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| Depends if it is a capital lease or an operating lease.
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MIKEB (talk|edits) said:
| 12 April 2008
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| I assumed it was a capital lease since he is setting up an asset for $20k.
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RoyDaleOne (talk|edits) said:
| 17 April 2008
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| I believe these answers are the tax basis answer and not A GAAP answer, because, under GAAP you would record a gain or loss FMV of the old asset and record the new machine at would have been (or would be) its true acquisition cost.
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