The Fair Value Principle

question 7

Multiple Choice

The fair value principle

• A)is one of the two costing principles followed by the IASB.
• B)is more useful than the cost principle for valuing some assets.
• C)dictates that an asset should be valued at the price at which it could be sold.
• D)All of the above.

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Definitions:

Equity Preservation

Strategies and practices aimed at maintaining or increasing the value of shareholders' equity in a company.

Optimal Way

The most efficient or effective method for achieving a specific goal or outcome.

Serious Cash Shortage

A financial situation where an entity lacks sufficient funds to cover its immediate or short-term obligations, leading to potential liquidity issues.

Venture

An undertaking that is typically risky but offers the potential for significant rewards, often associated with new businesses or startups.