# ASC 845-10-55: Nonmonetary Transactions — Overall — 55 Implementation Guidance and Illustrations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/845/10/#55-implementation-guidance-and-illustrations) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:3a4d4944867595c19010307425be36fc6fda39fd6c914630b6ad41226ed25926 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 845-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/845/10/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [845-10-55-1](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:046735c0136a466663f92692cc5c129bf97e81813f5df99a6d0281cf3cbdd872 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [845-10-30-10](https://asc.understandingaccounting.org/asc/845/10/#845-10-30-10) does not permit gain or loss recognition for the spinoff of [nonmonetary assets](https://asc.understandingaccounting.org/glossary/n/#nonmonetary-assets-and-liabilities "Nonmonetary assets and liabilities are assets and liabilities other than monetary ones. Examples are inventories; investments in common stocks; property, plant, and equipment; and liabilities for rent collected in advance.") to [owners](https://asc.understandingaccounting.org/glossary/o/#owners "Used broadly to include holders of ownership interests (equity interests) of investor-owned entities, mutual entities, or not-for-profit entities. Owners include shareholders, partners, proprietors, or members or participants of mutual entities. Owners also include owner and member interests in the net assets of not-for-profit entities.") of an entity. That prohibition also shall apply to pension-related assets or obligations transferred in a spinoff. The transition asset or obligation remaining in accumulated other comprehensive income and net gain or loss included in accumulated other comprehensive income shall be allocated to each pension plan in proportion to the projected benefit obligations of the two pension plans. Prior service cost included in accumulated other comprehensive income shall be allocated to the pension plans based on the applicable individuals included in the employee groups covered. See paragraphs [715-30-55-124 through 55-127](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-124) , which addresses the division of a pension plan. (The accounting treatment for a spinoff that involves a division of a pension plan should be similar to that for a spinoff involving a pension plan that was previously part of a larger pension plan.) ##### [845-10-55-2](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:8b235c697571746f6001636e1ee62d64c1e9a33eb49bc3d4602c7ffae3163459 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table summarizes the guidance contained in this Subtopic. - ![](https://asc.understandingaccounting.org/asc-img/GUID-8B2B75C9-5419-4B1F-B4B4-427F0C4B6AAB-low.gif) ASSET RECEIVED Investment accounted for by the equity method Controlled asset or group of assets that does not meet the definition of a business Controlled group of assets that meets the definition of a business ASSET GIVEN UP Investment accounted for by the equity method A transfer of an equity method investment should be accounted for under the provisions of Topic 860. Fair value (Topic 805) Controlled asset or group of assets that does not meet the definition of a business "If the contract is with a customer and within the scope of Topic 606, apply Topic 606. If the contract is not within the scope of Topic 606, evaluate if the transaction is within the scope of Subtopic 610-20. If so, apply Subtopic 610-20. If the contract is not within the scope of Subtopic 610-20 and is within the scope of Topic 845, apply Topic 845. Otherwise, apply other GAAP. " Fair value (Topic 805) Controlled group of assets that meets the definition of a business "If the controlled group of assets that meets the definition of a business is a conveyance of oil and gas mineral rights, apply Subtopic 932-360. Otherwise, apply Subtopic 810-10." Fair value (Topic 805) #### Illustrations ##### [845-10-55-3](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:3b836ce5cad3d4b32bc2d97aac2e3ae7f993a0f82c5bf8af2e84a8c7c597ecb3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates how an employer shall account for the transfer of a pension benefit obligation or plan assets to a spun-off entity's new pension plan. ##### [845-10-55-4](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:6fe7961206bbcfac2974a93e4851102e30ee6243a5fc71db5b1d76883b6b3076 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer (Entity A) incorporates a division (Entity B) and subsequently spins it off to the owners of the entity. The new entity assumes Entity A's projected benefit obligation under its pension plan (Old Plan) for the employees that are transferred as part of the spinoff. The accumulated benefit obligation for those employees ($30,000) is fully vested at the date of the spinoff. The portion of the projected benefit obligation attributable to the future compensation levels for those employees is $6,000. No plan assets are transferred to the new entity's pension plan (New Plan). ##### [845-10-55-5](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:4fdc65ce84f01cccf67ecbd7dcf080026f4751db5eeb0df917badc7cd4c2d547 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate two scenarios: 1. a Accounting for a transfer of a pension benefit obligation only (Case A) 2. b Accounting for a transfer of a plan assets and a pension benefit obligation (Case B). ##### [845-10-55-6](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:e8dfd6ec465e860ba8b1f6846ae3d618267d8adba952ef72834bd69998327421 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the funded status of the pension plans immediately before and after the spinoff. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-89EEAA80-375B-4AD4-82D8-5140666A0C0B-low.gif) Before Spinoff After Spinoff Old Plan Old Plan New Plan Assets and obligations: Accumulated benefit obligation " $(72,000)" " $(42,000)" " $(30,000)" Effect of future compensation levels " (18,000)" " (12,000)" " (6,000)" Projected benefit obligation " (90,000)" " (54,000)" (a) " (36,000)" (a) Plan assets at fair value " 160,000 " " 160,000 " (b) - (b) Funded status and recognized asset (liability) " $70,000 " " $106,000 " " $(36,000)" Amounts recognized in accumulated other comprehensive income: Transition asset " $(40,000)" " $(24,000)" (c) " $(16,000)" (c) Prior service cost " 25,000 " " 17,500 " (d) " 7,500 " (d) Net gain " (55,000)" " (33,000)" (c) " (22,000)" (c) " $(70,000)" " $(39,500)" " $(30,500)" (a) Allocation based on individual employees covered by each pension plan. (b) Allocation determined by Entity A. (Case assumes that no regulatory requirements apply.) (c) "Allocation based on percentage of total projected benefit obligation ($90,000) assumed by each pension plan, which is 60 percent and 40 percent for the Old Plan and New Plan, respectively." (d) "Allocation based on prior service associated with the future years of service of the individual employees covered by each pension plan. " ##### [845-10-55-7](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:3b686b63e35265fa2a8a05e7f907136209f601a15c57ad954e9b508ed451c151 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entries to account for the spinoff are as follows. - Entity A - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-EF06D648-1DA7-41D6-89FB-138E9DFAA6A9-low.gif) Pension asset " $36,000 " Accumulated other comprehensive income—transition asset " 16,000 " Accumulated other comprehensive income—net gain " 22,000 " Stockholders' equity (a) " $66,500 " Accumulated other comprehensive income—prior service cost " 7,500 " (a) The accounting within stockholders' equity is not addressed (other than for components of accumulated other comprehensive income). The equity accounts are those used to account for all assets and liabilities transferred or received as part of the spinoff. No gain or loss results from the spinoff. - To record the transfer of a pension benefit obligation and net deferred amounts from Entity A to Entity B - Entity B - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-AC958CEA-2749-4E6D-BB25-B452DF9A4268-low.gif) Stockholders' equity (a) " $66,500 " Accumulated other comprehensive income—prior service cost " 7,500 " Pension liability " $36,000 " Accumulated other comprehensive income—transition asset " 16,000 " Accumulated other comprehensive income—net gain " 22,000 " (a) The accounting within stockholders' equity is not addressed (other than for components of accumulated other comprehensive income). The equity accounts are those used to account for all assets and liabilities transferred or received as part of the spinoff. No gain or loss results from the spinoff. - To record the receipt of a pension benefit obligation and net deferred amounts from Entity A (Entity B should not recognize the effects of assuming the pension benefit obligation as the cost of either a pension plan amendment or an initiation of a pension plan that is subject to amortization.) ##### [845-10-55-8](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:89a080d38b211f3000b6c31c004d979632c7dde4e77a889c5aba7132775df533 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, the plan assets ($28,000) are also transferred to the New Plan. The following is the funded status of the pension plans immediately before and after the spinoff. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-CE8E3274-4F66-4A97-9022-4A004C126CBA-low.gif) Before Spinoff After Spinoff Old Plan Old Plan New Plan Assets and obligations: Accumulated benefit obligation " $(72,000)" " $(42,000)" " $(30,000)" Effect of future compensation levels " (18,000)" " (12,000)" " (6,000)" Projected benefit obligation " (90,000)" " (54,000)" (a) " (36,000)" (a) Plan assets at fair value " 160,000 " " 132,000 " (b) " 28,000 " (b) Funded status and recognized asset (liability) " $70,000 " " $78,000 " " $(8,000)" Amounts recognized in accumulated other comprehensive income: Transition asset " $(40,000)" " $(24,000)" (c) " $(16,000)" (c) Prior service cost " 25,000 " " 17,500 " (d) " 7,500 " (d) Net gain " (55,000)" " (33,000)" (c) " (22,000)" (c) " $(70,000)" " $(39,500)" " $(30,500)" (a) Allocation based on individual employees covered by each pension plan. (b) Allocation determined by Entity A. (Illustration assumes that no regulatory requirements apply.) (c) "Allocation based on percentage of total projected benefit obligation ($90,000) assumed by each pension plan, which is 60 percent and 40 percent for the Old Plan and New Plan, respectively." (d) Allocation based on prior service cost associated with the future years of service of the individual employees covered by each pension plan. ##### [845-10-55-9](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:b3731da433634692d5e4b7d2042d5295b78634bad7d3de991772a628192de007 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entries to account for the spinoff are as follows. - Entity A - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-14923783-E718-4A47-AA76-0A04E652722E-low.gif) Pension asset " $8,000 " Accumulated other comprehensive income—transition asset " 16,000 " Accumulated other comprehensive income—net gain " 22,000 " Stockholders' equity(a) " $38,500 " Accumulated other comprehensive income—prior service cost " 7,500 " (a) The accounting within stockholders' equity is not addressed (other than for components of accumulated other comprehensive income). The equity accounts are those used to account for all assets and liabilities transferred or received as part of the spinoff. No gain or loss results from the spinoff. - To record the transfer of plan assets, a pension benefit obligation, and net deferred amounts from Entity A to Entity B - Entity B - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-F5D4C819-D0BD-47E6-A7D9-812BED759C3D-low.gif) Stockholders' equity (a) " $38,500 " Accumulated other comprehensive income—prior service cost " 7,500 " Pension liability " $8,000 " Accumulated other comprehensive income—transition asset " 16,000 " Accumulated other comprehensive income—net gain " 22,000 " (a) The accounting within stockholders' equity is not addressed (other than for components of accumulated other comprehensive income). The equity accounts are those used to account for all assets and liabilities transferred or received as part of the spinoff. No gain or loss results from the spinoff. - To record the receipt of plan assets, a pension benefit obligation, and net deferred amounts from Entity A (Entity B should not recognize the effects of assuming the pension benefit obligation as the cost of either a pension plan amendment or an initiation of a pension plan that is subject to amortization or the receipt of cash as a gain subject to amortization.) ### Purchases and Sales of Inventory with the Same Counterparty ##### [845-10-55-10](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:da26913e1d4fcd50e233bb8200ba4bf91026d0bc523057538c5de4d9b21e7f33 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The application of the indicators (see paragraph [845-10-25-4](https://asc.understandingaccounting.org/asc/845/10/#845-10-25-4)) depends on the relative facts and circumstances and requires significant judgment. The assessment of that judgment in a given fact pattern is based on the assumed facts; accordingly, judgment will vary in differing fact patterns. ##### [845-10-55-11](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:0413cffcfd30873be408bd3c6bd74b1bc6c08e67192889c0ff2d0e76c02ed28b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the following: 1. a Whether the described transaction shall be viewed as a single [exchange](https://asc.understandingaccounting.org/glossary/e/#exchange "An exchange (or exchange transaction) is a reciprocal transfer between two entities that results in one of the entities acquiring assets or services or satisfying liabilities by surrendering other assets or services or incurring other obligations.") transaction as discussed in paragraphs [845-10-25-4 through 25-5](https://asc.understandingaccounting.org/asc/845/10/#845-10-25-4) 2. b Whether the nonmonetary exchange of inventory within the same line of business shall be recognized at fair value as discussed in paragraphs [845-10-30-15 through 30-16](https://asc.understandingaccounting.org/asc/845/10/#845-10-30-15) . ##### [845-10-55-12](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:11d9334a6bfc7d2feb0bc22788f368c618e55e5e27432c70f6f6c15f82251b6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Oil Entity A produces heavy crude oil (dense, viscous crude oil) in California and has refining operations in other parts of the United States including West Texas. Given its supply-chain management needs, Entity A would like to acquire West Texas intermediate crude oil in the most cost-efficient manner. ##### [845-10-55-13](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:7e96b8fe088eecc295e173dd15f3404dda9eb5c25467b28cbf53e2acde41ba50 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As part of its analysis in determining the most cost-efficient approach to acquiring West Texas intermediate crude oil, Entity A uses the following available information regarding the current oil needs (demand) and excess oil capacity (supply) of the various oil entities. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-612B39A6-F6BF-4A95-B58C-CF3E16CCAF24-low.gif) Entity Demand/Location Supply/Location Entity A West Texas intermediate crude oil/Texas Heavy crude oil/California Entity B Heavy crude oil/California Sweet crude oil/Oklahoma Entity C Sweet crude oil/Oklahoma West Texas intermediate crude oil/Texas ##### [845-10-55-14](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:1fbcf7d6b46a68561e2f0778bbd54265d2b4e46f8a803e43e81f0446923bb8da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A enters into an arrangement to sell Entity B a specified quantity of its California production and enters into a separate arrangement at the same time to purchase a specified quantity of Entity B's sweet crude oil production in Oklahoma. Also at the same time, Entity A enters into an arrangement to sell Entity C the sweet crude oil in Oklahoma purchased from Entity B, and enters into a separate arrangement at the same time to acquire a specified quantity and quality of West Texas intermediate crude oil from Entity C for its West Texas refining operations. ##### [845-10-55-15](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:0ba97ce524569ae5439981b8a453dcce50c4248ec7671f5e67199d04e7111375 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A issues invoices and purchase orders for each transaction and each is gross-cash settled at market prices. Although the quantities differ, there is an insignificant difference in total value of oil being exchanged in each transaction. Entity A would not sell its inventory to Entity B or Entity C without an understanding that the counterparty will perform. Entity A considers all crude oil to be the same class of inventory (that is, raw materials) for purposes of financial reporting. Entity A does not account for these arrangements as derivatives; therefore, the guidance in Subtopic 815-10 is not applicable. ##### [845-10-55-16](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:c6dbce9f7322f8398d59f705a830234471f240230f95401a800bf60cc1b36a33 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Based on an evaluation of the circumstances, Entity A's inventory purchase and sales transactions with Entity B were entered into in contemplation of one another because the sole purpose of selling inventory was to procure inventory from the same counterparty in the most cost-efficient manner. While it is a matter of judgment as to whether Entity A entered into its inventory purchase and sales transactions with Entity B in contemplation of one another, certain factors support this assessment. For instance, the transaction to sell inventory was entered into simultaneously with the transaction to purchase inventory. In addition, the sole purpose of selling heavy crude oil inventory is to facilitate the purchase of sweet crude oil inventory. Although the purpose of a transaction is not explicitly identified as an indicator in the consensus guidance, it is nevertheless relevant to the assessment of whether the inventory transactions were entered into in contemplation of one another. While the inventory transactions were not settled on a net basis nor were they entered into at off-market prices, the other indicators, together with the specific facts and circumstances described above, provide persuasive evidence that the transactions were entered into in contemplation of one another. Therefore, although each transaction was separately documented and gross-cash settled at market prices, the inventory transactions should be deemed a single exchange between Entity A and Entity B for purposes of applying the guidance in the Purchases and Sales of Inventory with the Same Counterparty Subsections. From the perspective of Entity A, an analysis of the inventory purchase and sales transactions between Entity A and Entity C would result in the same conclusion as the analysis of the transactions between Entity A and Entity B. ##### [845-10-55-17](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:f43758217ce3fc94e48be27568cf6a526b1341b8dc9038dd7e9c34a22d8f79b6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A would recognize the single exchange transactions with both Entity B and Entity C at carryover basis because, from Entity A's perspective, the same class of inventory (raw materials for raw materials) was surrendered and received. ##### [845-10-55-18](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:aeb1ef84ce19c3d5d6f8d84e7eb24894b9d94045d0b6806ed80b64e7045c16a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the following: 1. a Whether the described transaction shall be viewed as a single exchange transaction as discussed in paragraphs [845-10-25-4 through 25-5](https://asc.understandingaccounting.org/asc/845/10/#845-10-25-4) 2. b Whether the nonmonetary exchange of inventory within the same line of business shall be recognized at fair value as discussed in paragraphs [845-10-30-15 through 30-16](https://asc.understandingaccounting.org/asc/845/10/#845-10-30-15) . ##### [845-10-55-19](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:f7b965a6b45bbac2f06a79f3f7b6ab8e95f4087a7ce3e52207e36a41de58c523 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Dealer A in Suburb X has an excess inventory of cars relative to near-term expected demand and does not have enough pickup trucks to meet near-term expected demand. Dealer B in Suburb Y has an excess inventory of pickup trucks and not enough cars to meet near-term expected demand. Dealer A negotiates an arrangement to sell a specified number of cars to Dealer B and, although not committed to do so, Dealer B may deliver pickup trucks of equivalent value at wholesale prices to Dealer A. Dealer A must purchase pickup trucks from Dealer B if Dealer B chooses to deliver the trucks the following week. Historically, Dealer B has always delivered the trucks to Dealer A under these types of arrangements. At the time Dealer A delivers its cars to Dealer B, Dealer A believes Dealer B will ship the trucks the following week. Each transaction is separately documented and gross-cash settled at wholesale prices on the date of delivery. ##### [845-10-55-20](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:39e74851618bb090706e8bdc580371ac62ed4e8008548de806109068fdab912c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Based on an evaluation of the circumstances, Dealer A's inventory sales transaction was entered into in contemplation of a reciprocal inventory purchase transaction from Dealer B because, as a condition of selling inventory to Dealer B, Dealer A must accept delivery of trucks from Dealer B at a later date, if Dealer B chooses to make such a delivery. Consistent with past history, when Dealer A enters into this kind of arrangement with Dealer B, Dealer A fully expects to purchase the trucks. Therefore, the sale of the cars should be considered combined with the purchase of the trucks. ##### [845-10-55-21](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:cc98a5ec6f6eff624eb30462ec592313363985ad4e669c3f2b5a1cd685708623 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. While it is a matter of judgment as to whether Dealer A entered into its inventory sales transaction in contemplation of the inventory purchase transaction, certain factors support this assessment. For instance, a transaction to sell cars to Dealer B was entered into with an anticipated transaction to purchase trucks from Dealer B (if Dealer B chooses to deliver the trucks) simultaneously. Even though the transaction to purchase trucks depended on whether Dealer B chose to deliver, Dealer A believed that there was a high degree of certainty that Dealer B would deliver. In addition, because the inventory pricing is at wholesale, it indicates that these transactions were not on the same terms as transactions with their typical retail customers. While this last factor is not related to a specific indicator (see guidance in paragraph [845-10-25-4](https://asc.understandingaccounting.org/asc/845/10/#845-10-25-4)), it is relevant in assessing the nature of the relationship between Dealer A and Dealer B in the context of the purchase and sales transactions. While Dealer A and Dealer B did not agree to net-settle the inventory transactions, the expectation of a reciprocal purchase transaction from Dealer B in the context of the relationship between Dealer A and Dealer B indicates that the sale transaction by Dealer A to Dealer B was entered into in contemplation of the purchase transaction from Dealer B. Therefore, although each transaction was separately documented and gross-cash settled, these inventory transactions should be deemed a single exchange for purposes of applying the [Purchases and Sales of Inventory with the Same Counterparty Subsection](https://asc.understandingaccounting.org/asc/845/10/#30-initial-measurement) of Section 845-10-30. ##### [845-10-55-22](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:78183cf5627f888fb7d06deddf2ee1199d765be747699d1f5cc9852295b0549e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When evaluating the inventory transactions as a single nonmonetary exchange, Dealer A would recognize the transactions at carryover basis because the same class of inventory is being exchanged (finished goods exchanged for finished goods). ##### [845-10-55-23](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:e35fbed2ad8c08b2635c06a3fe41564fc3d823c3e11ea7b1345753a1f8a2fe8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the following: 1. a Whether the described transaction shall be viewed as a single exchange transaction as discussed in paragraphs [845-10-25-4 through 25-5](https://asc.understandingaccounting.org/asc/845/10/#845-10-25-4) 2. b Whether the nonmonetary exchange of inventory within the same line of business shall be recognized at fair value as discussed in paragraphs [845-10-30-15 through 30-16](https://asc.understandingaccounting.org/asc/845/10/#845-10-30-15) . ##### [845-10-55-24](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:28106beee87e61fdbcb53b5cd98bb46337f5b54ec272a2ddf5db9f8ce2e6de07 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Multinational Manufacturer A has a longstanding business relationship with multinational Manufacturer B, whereby each manufacturer will buy and sell inventory from the other on an as-needed basis at market prices. Manufacturer A sells materials to Manufacturer B based on a purchase order from Manufacturer B. Two days later, Manufacturer B sells materials to Manufacturer A based on a separate purchase order from Manufacturer A. Neither transaction was predicated on the occurrence of the other transaction occurring through either an implied arrangement or a contractual arrangement, and, historically, Manufacturer A has sold twice as much in value to Manufacturer B as Manufacturer B has sold to Manufacturer A. Both of these inventory transactions are gross-cash settled at market prices. ##### [845-10-55-25](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:8eb1822e9f8dd1caebb8923981bad2c39cf8aa72f6e878c059305e7eabf5d523 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Based on an evaluation of the circumstances, Manufacturer A's inventory purchase and sales transactions were not entered into in contemplation of one another. ##### [845-10-55-26](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:b715111ad2b86d8ef301424b82810a07674f3a332288222053e60040960642ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This assessment is supported by reciprocal inventory purchase and sales transactions not being negotiated between the two counterparties at the same time. In addition, there is no correlation between the value of goods delivered to Manufacturer B and the value of goods received from Manufacturer B. Although this last factor is not explicitly identified in the guidance in this Subtopic, it further strengthens the assessment that the inventory transactions were not entered into in contemplation of one another. Consequently, the inventory purchase and sales transactions would not be deemed a single exchange for purposes of applying the [Purchases and Sales of Inventory with the Same Counterparty Subsection](https://asc.understandingaccounting.org/asc/845/10/#30-initial-measurement) of Section 845-10-30 and would be considered separate monetary transactions subject to the guidance in other relevant generally accepted accounting principles (GAAP). ### Exchanges Involving Monetary Consideration ##### [845-10-55-27](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:308ab76ca6a47833e48cff2c5fc9236d81d32d9de3d4c3042b10e8b3c48080ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-05](https://asc.understandingaccounting.org/updates/asu-2017-05/). ##### [845-10-55-28](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:71d0d63ebece389c3e343cbef88c5d9828404ecacb959281084aafe0d36005de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-05](https://asc.understandingaccounting.org/updates/asu-2017-05/). ##### [845-10-55-29](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:c94df5f4b2d3dccca5669fa01bec102e8ffce7e05f00234c18ed61825dbf3a01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [845-10-55-30](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:ac6cc80078bddaa6591d75d16c0733420f720727c2a89d2f2e20b706abe59bbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [845-10-55-31](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:680d1c46eefef0d84afaca9faf30bb0f7474ce84fa5b68698f88ed0cb0e7b776 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [845-10-55-32](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:41d34019eafd460efeed6f54a78277b4fdcaef04882e243276bc62749585e7cf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [845-10-55-33](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:05b35e68bd96f08fea5ead52696d578654c6a304e0a460091feebb4e68a048ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [845-10-55-34](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:42d2f18bb52045a716ca43e16d76ee58ea90e722e515e2b19670aef9959bd6a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [845-10-55-35](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:7328e88256ef8218aeabd86efe60b87ba342df16c0df9513e3ff35d7f14ed860 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [845-10-55-36](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:a2506eb017f9af32093be2bf1c4adeb8c184c2b12f13644c27d2f9a223a26554 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [845-10-55-37](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-37) Pending content: no Source downloaded (UTC): 2026-09-10T01:59:48.528Z to 2026-09-10T01:59:48.528Z Record version: sha256:c17edca7f34efa81a71bc259e4b2933c1d7e014e05711f79049f73f4a3152598 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/).