Self Constructed Assets and Nonreciprocal Transfers

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Imagine you are the senior accountant in the Fixed Assets department at your
organization, and management is undecided as to whether it should construct its
fixed assets or purchase such assets from an outside source. You are responsible
for preparing a report to management, highlighting the advantages and
disadvantages of self-constructed assets. Suggest to management two (2)
advantages of purchasing the assets from an outside organization, as opposed to
constructing the assets internally. Justify your response.

  • Imagine that management is considering a nonreciprocal transfer of an old
    asset. Determine the key arguments for and against the accounting treatment of a
    nonreciprocal transfer. Select a position for or against the accounting
    treatment, and explain the method that reflects the best accounting practice

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