A Company Can Have a Liability Even If the Amount

question 151

True/False

A company can have a liability even if the amount of the obligation is unknown.

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Definitions:

Fair Value Measurement

An accounting standard for measuring the value of assets and liabilities based on the current market price.

GAAP Hierarchy

A framework within Generally Accepted Accounting Principles that ranks the authority of financial reporting guidelines and standards in the United States.

Level 3

Refers to a category of financial assets and liabilities valued based on inputs that are not readily observable in the market.

Quoted Prices

The most recent price at which an asset or security was traded on a financial market; often used for valuation and accounting purposes.