Final answer:
The two exceptions to valuing PPE and intangible assets at their fair value during non-monetary exchanges are when the fair value is not determinable and when the exchange lacks commercial substance. In such cases, book value is used, adjusted by any cash payments related to the exchange.
Step-by-step explanation:
The question is about identifying the two exceptions where property, plant, and equipment (PPE) and intangible assets acquired in non-monetary exchanges are not valued at the fair value of the assets given up. These exceptions are when the fair value is not determinable and when the exchange lacks commercial substance.
When fair value is not determinable, accounting standards require that the book value (or carrying amount) of the asset given up be used instead, adjusted for any cash paid or received in the exchange. This adjustment reflects the cost of the new asset as it's essentially a continuation of the old asset's value.
An exchange is considered to lack commercial substance if it is not expected to significantly alter the future cash flows of the company. For example, replacing an old machine with a nearly identical one may not change the economic position of the company, so the new machine would be recorded at the book value of the old machine plus or minus any cash paid or received.