Current GAAP Requires a Company to Disclose the Fair Value

question 58

Multiple Choice

Current GAAP requires a company to disclose the fair value of its financial instruments and to disclose all significant concentrations of credit risk due to its financial instruments.The FASB's rationale for this disclosure includes allowing readers to

• A)better identify major customers
• B)compute each company's risk
• C)better determine a company's financial flexibility
• D)compute liquidity ratios

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Definitions:

Routine Request

A standard or regular request for information, services, or action within an organization or between individuals.

Explain And Justify

The process of clarifying how and why a particular conclusion was reached, providing reasons and evidence to support it.

Explanation Developed

A detailed account or interpretation of a concept, situation, or problem.

Routine Message

Regular, everyday communications that convey standard information or procedures.