USGAAP and IFRS Require Firms to Disclose the Fair Value

question 10

Multiple Choice

U.S.GAAP and IFRS require firms to disclose the fair value of long-term notes and bonds in notes to the financial statements.Fair value is

• A)the amount the firm would pay to settle the debt on the date of the balance sheet.
• B)the current market price in the case of items that trade in active markets.
• C)the present value of the contractual cash flows discounted at a current market interest rate that reflects all the factors that market participants would consider, including the item's credit risk.
• D)all of the above
• E)none of the above

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Definitions:

Open Disclosure

The practice of openly sharing information, including admitting mistakes or failures, in the spirit of transparency and honesty.

Conformity Orientation

The degree to which individuals in a group or family environment are expected to adhere to shared norms and values.

Agree to Beliefs

The act of consenting or accepting particular convictions or principles as true.

Blended Family

A family unit created by merging two previously separate families, often including children from one or both original families.