Which of the Following Steps Is Not Relevant When Measuring

question 12

Multiple Choice

Which of the following steps is not relevant when measuring liabilities?

• A) The particular liability that is the subject of the measurement.
• B) The principal (or most advantageous) market for the liability.
• C) The valuation premise that is appropriate for the measurement.
• D) The valuation technique(s) appropriate for the measurement.

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Definitions:

Interest Per Month

Interest per month is the amount of interest charged or earned on a loan or investment for a one-month period, typically expressed as a percentage of the principal.

Year-end Balance

The total amount of money in an account or on the financial statements at the conclusion of the fiscal year.

Compounded Monthly

Interest on an investment or loan calculated each month on both the initial principal and the accumulated interest from previous months.

Effective Annual Interest Rate

The effective annual interest rate considers the effects of compounding, providing a true reflection of the annual cost of borrowing over a year.