When Valuing Financial Instruments at Fair Value (The Fair Value

question 35

Multiple Choice

When valuing financial instruments at fair value (the fair value option) ,

• A)ASPE allows this option only for certain financial instruments.
• B)IFRS allows this for all financial instruments.
• C)IFRS requires that this option be used only where fair value does not result in more
• Relevant information.
• D)IFRS requires that non-performance risk be included in the fair value measurement.

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Definitions:

Break-even Point

The break-even point is the level of production or sales at which a business's total revenues equal its total expenses, resulting in no net profit or loss.

Break-even Point

The point at which total revenues equal total costs, and the business makes neither a profit nor a loss.

Margin Of Safety

The difference between actual or expected sales and the break-even point, indicating the amount by which sales can drop before losses begin.

Volume Of Sales

The total quantity of goods or services sold by a company within a specific period.