Appendix a of AASB 13 Fair Value Measurement Defines Fair

question 22

Multiple Choice

Appendix A of AASB 13 Fair Value Measurement defines fair value as:

• A) The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.
• B) The price that would be paid to purchase an asset or transfer a liability.
• C) A transaction that assumes exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction (e.g. a forced liquidation or distress sale).
• D) The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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Definitions:

Commercial Banks

Financial institutions that offer a wide range of services, including deposits, loans, and other financial products to businesses and individuals.

Incomes

Regular financial earnings obtained from labor services or investment gains.

U.S. Currency

The official monetary system of the United States, consisting of the dollar and its denominations.

M3

A measure of the total amount of money in circulation within an economy, including cash, deposits, and short-term securities.