When Determining the Fair Values of Assets Acquired in an Acquisition

question 40

Multiple Choice

When determining the fair values of assets acquired in an acquisition, the highest level of measurement per GAAP is

• A)​adjusted market value based on prices of similar assets.
• B)​unadjusted market values in an actively traded market.
• C)​based on discounted cash flows.
• D)​the entity's best estimate of an exit or sale value.

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Definitions:

Cultivate Hops

The agricultural practice of growing hops, which are plants used primarily as a flavoring and stability agent in beer.

Market Prices

The prevailing price at which goods, services, or securities are bought and sold in a market.

Brewery

An establishment focused on the production of beer through the fermentation process, which may also serve as a venue for selling and tasting.

Nominal Damages

A small monetary award (often one dollar) granted to a plaintiff when no actual damage was suffered or when the plaintiff is unable to show such loss with sufficient certainty.