Derecognition of property


the question i have relates to the the value of PP&E when sold and separately, when it is exchanged.

when sold, the item goes from held for use to available for sale, the carrying amount is impaired if required and any difference between the impaired value and the price sold is recorded on the income statement.

when an asset is disposed of other than by sale, there was a question where the answer mentioned “The land acquired, and hence the proceeds for the disposition of the truck, is measured at the fair value given up, unless the acquired asset’s fair value is more clearly evident.”

my question - why don’t we use the fair value of both, the item given up and the item acquired?

many thanks

No . . . when it’s sold it goes from on the balance sheet to not on the balance sheet.

Sorry - prior to being sold, it is reclassified and revalued.

Re the second part, I’m stuck as to why the fair value of both the existing asset and acquired asset is done at the fair value.

“When an asset is exchanged, accounting for the exchange typically involves removing the carrying amount of the asset given up, adding a fair value for the asset acquired, and reporting any difference between the carrying amount and the fair value as a gain or loss. The fair value used is the fair value of the asset given up unless the fair value of the asset acquired is more clearly evident.” — to be more specific, i don’t get the bit in bold?
thank you