Which of the Following Best Describes the Role Played by the 'Income

question 21

Multiple Choice

Which of the following best describes the role played by the 'income approach' in determining an asset's fair value

• A)it is the method required by AASB 116 to estimate fair value in the absence of an active, liquid market
• B)it refers to the process of comparing an asset's fair value to the period profit or loss (sometimes called income or net income)
• C)it is another term for net present value, and in some circumstances NPV is the best estimator of fair value
• D)it has no formal role in the current AASB 116, although it was mentioned in the subsequently withdrawn Australian implementation guidance

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Definitions:

Natural Tendency

An inherent inclination or propensity towards certain behaviors or actions.

Physical World

The realm of material objects, phenomena, and forces that can be measured and understood through scientific investigation.

Relative Age Effect

A phenomenon in sports and education where the age difference among peers affects their performance and opportunities.

Consumer Psychology

The study of how people's thoughts, beliefs, feelings, and perceptions influence how they buy and relate to goods and services.