The ____ is used to record the value of shares that are issued in exchange for non cash asset
The fair value is usually used to record the value of shares that are issued in exchange for non-cash assets.
The journal entry to record the value of shares that are issued in exchange for non-cash assets is called a "share issuance journal entry." This entry is used to record the issuance of shares when non-cash assets, such as property, equipment, or services, are contributed to the company in exchange for ownership in the business. The specific accounts and amounts involved in this journal entry will depend on the nature and value of the non-cash asset being contributed.
The specific term you are looking for is "Share-Based Payment." Share-based payment is a common practice in many companies where they issue shares or other equity instruments in exchange for non-cash assets, such as services rendered or goods received.
To find this answer, you can follow these steps:
1. Start by understanding the concept of "share-based payment" and its purpose in financial accounting.
2. Research the accounting principles and standards applicable to share-based payments, such as International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP).
3. Consult relevant accounting literature, such as the IFRS or GAAP guidelines, which provide detailed explanations of how to record and value share-based payments.
4. Look for specific accounting standards or practices related to the recording and valuation of shares issued in exchange for non-cash assets.
5. Identify the appropriate accounting method or treatment for recording such transactions, which may involve understanding the fair value of the non-cash asset and allocating its value to the shares issued.
Remember that accounting standards may vary depending on the country or jurisdiction, so it's essential to refer to the appropriate guidelines applicable to your situation.