Financial Accounting Series

Statement of Financial Accounting Standards No. 153Exchanges of Nonmonetary Assetsan amendment of APB Opinion No. 29December 2004INTRODUCTION1. This Statement addresses the measurement of exchanges of nonmonetary assets. Iteliminates the exception from fair value measurement for nonmonetary exchanges ofsimilar productive assets in paragraph 21(b) of APB Opinion No. 29, Accounting forNonmonetary Transactions, and replaces it with an exception for exchanges that do nothave commercial substance. This Statement specifies that a nonmonetary exchange hascommercial substance if the future cash flows of the entity are expected to changesignificantly as a result of the exchange.STANDARDS OF FINANCIAL ACCOUNTING AND REPORTINGAmendments to Opinion 292. Opinion 29 is amended as follows: [Added text is underlined and deleted text isstruck out.]a. Paragraph 3(c) and its related footnote 3:Exchange (or exchange transaction) is a reciprocal transfer between an enterpriseand another entity that results in the enterprise’s acquiring assets or servicesor satisfying liabilities by surrendering other assets or services or incurring otherobligations. 3 A reciprocal transfer of a nonmonetary asset shall be deemed anexchange only if the transferor has no substantial continuing involvement in thetransferred asset such that the usual risks and rewards of ownership of the assetare transferred.3 APB Statement No. 4, Basic Concepts and Accounting Principles Underlying FinancialStatements of Business Enterprises, paragraphs 180−183, contains a more complete explanation ofexchanges and nonreciprocal transfers.1