Why would you choose carrying amount over exchange amount for a non-monetary transaction?

Choosing the carrying amount over the exchange amount for a non-monetary transaction is primarily based on the need to maintain consistency in financial reporting and to avoid recognizing gains or losses that do not reflect actual economic events. In situations where there are substantial changes in ownership interests, it is crucial to apply the carrying amount to ensure that the reported financial position remains relevant and comparable. This aligns with the principles of conservatism in accounting, where recognizing realized gains or losses without triggering an actual economic event could mislead users of financial statements.

In the context of non-monetary transactions, maintaining the carrying amount allows the company to transfer assets without distorting the value reflected on its balance sheet, particularly when the exchange is not indicative of the current market conditions or economic reality. By utilizing the carrying amount, the company can avoid unnecessary volatility in its financial results and ensure that the ownership changes are reported in a manner that reflects the company's ongoing financial performance.