CERTYNEX IFRS ACADEMY

Pivane exchanges an owner-occupied building (carrying amount 750,000, fair value 820,000) for an investment property. The expected cash flows are not changed: the exchange lacks commercial substance (case data). No cash is paid. At what amount is the property acquired recognised?

820,000, the fair value of the asset given up, as for an exchange with commercial substance.

750,000, the carrying amount of the asset given up, for lack of commercial substance.

70,000, the difference between fair value and carrying amount of the asset given up.

0, an exchange without commercial substance giving rise to no recognition.