AASB 116 Provides Guidance on Fair Values Which States

question 17

Multiple Choice

AASB 116 provides guidance on fair values which states:

• A) Where an active and liquid market exists for an asset, the market price represents evidence of the asset's fair value.
• B) Fair values are determined on the basis that an entity is a going concern.
• C) Where no market exists the price should be based on the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.
• D) All of the given answers.
• E) None of the given answers.

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Definitions:

Wheat Farm

A specialized agricultural operation focused on the cultivation and production of wheat.

Free-rider Problem

A situation where individuals or entities receive the benefit of a good or service without contributing to its cost, commonly associated with public goods.

Market Failure

A situation where the allocation of goods and services is not efficient, often leading to a net social welfare loss.

Goods

Physical items produced for sale or use, characterized by their tangibility and their capacity to satisfy human wants or needs.