The Method of Accounting for an Investment Under the Fair

question 21

True/False

The method of accounting for an investment under the fair value under profit or loss is irrevocable after initial designation.

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Definitions:

Fair Value

The estimated price at which an asset would change hands between a willing buyer and seller, not under compulsion and with reasonable knowledge of the relevant facts.

Mortgage

A loan secured by real property, typically used to purchase that property.

Book Value

The value of an asset according to its balance sheet account balance, taking into account the cost of the asset minus accumulated depreciation.

Fair Value

The estimated price at which an asset or liability could be bought or sold in a current transaction between willing parties, other than in a liquidation sale.