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10 Cards in this Set
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b. The price that would be received to sell the asset at the measurement date. |
Fair value of an asset should be based upon
a. The replacement cost of an asset. b. The price that would be received to sell the asset at the measurement date. c. The original cost of the asset. d. The price that would be paid to acquire the asset |
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a. The market that has the greatest volume and level of activity for the asset |
Which of the following describes a principal market for establishing fair value of an asset?
a. The market that has the greatest volume and level of activity for the asset b. Any broker or dealer market c. The most observable market d. The market in which the amount received would be maximized |
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d. The price should be adjusted for cost to transport the asset to the principal market. |
Which statement is true for measuring an asset at fair value? a. The price of the asset should be adjusted for transaction cost. b. The fair value of the asset should be adjusted for cost of disposal. c. The fair value is based upon an entry price to purchase the asset. d. The price should be adjusted for cost to transport the asset to the principal market. |
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d. The asset is in the highest and best use |
Which of the following is an assumption used in fair value measurement? a. The asset must be in-use b. The asset must be considered in-exchange c. The most conservative estimate must be used d. The asset is in the highest and best use |
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c. An independent entity that is knowledgeable about the asset. |
Which of the following would meet the qualifications as market participants? a. A liquidation market in which sellers are compelled to sell. b. A subsidiary of the reporting unit interested in purchasing assets similar to those being valued. c. An independent entity that is knowledgeable about the asset. d. A broker or dealer that wishes to establish new market for the asset. |
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a. The price paid to acquire the asset. |
The fair value at initial recognition is a. The price paid to acquire the asset. b. The price paid to acquire the asset less transaction cost. c. The price paid to transfer or sell the asset. d. The carrying amount of the asset acquired. |
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b. Residual value approach |
Which of the following is not a valuation technique used in fair value measurement? a. Income approach b. Residual value approach c. Market approach d. Cost approach |
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a. Income approach |
Valuation techniques for fair value that include the Black-Scholes formula, a binomial model, or discounted cash flow are examples of which valuation technique? a. Income approach b. Market approach c. Cost approach d. Exit value approach |
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b. Prices and other relevant information of transactions from identical or comparable assets |
The market approach for measuring fair value requires which of the following? a. Present value of future cash flows b. Prices and other relevant information of transactions from identical or comparable assets c. The price to replace the service capacity of the asset. d. The weighted average of the present value of future cash flows |
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b. Quoted market price available from a business broker for a similar asset |
Which of the following would be considered a Level 2 input for fair value measurement? a. Quoted market price on a stock exchange for an identical asset b. Quoted market price available from a business broker for a similar asset c. Historical performance and return on the investment d. All of these would be considered Level 2 input for fair value measurement |
