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      Question

      Which of the following is a correct treatment when a

      company issues shares for consideration other than cash?
      A Record at agreed fair value of shares or fair value of non-cash consideration, whichever is more reliably measurable Correct Answer Incorrect Answer
      B Always record at par value only Correct Answer Incorrect Answer
      C Record only when cash is received later Correct Answer Incorrect Answer
      D Never record share premium Correct Answer Incorrect Answer

      Solution

      When shares are issued for non-cash consideration, the asset acquired and the equity issued are recorded at the fair value of the consideration received or the fair value of the shares issued, whichever is more clearly evident.

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